Finding Text
Criteria: The Organization utilizes a subsidiary system to maintain and monitor loan account balances. The subsidiary system should be reconciled on a regular basis to the general ledger control accounts. Condition: The loan receivable balances in the general ledger were not fully reconciled to the subsidiary system during the year. Cause: The Organization experienced a personnel turnover during the year which resulted in certain account reconciliations to be partially completed, and certain accounting processes and reconciliations were behind schedule. Reconciling items and differences were not identified and resolved in a timely manner. Effect: Without timely reconciliation procedures, loans receivable could be incorrectly reported in the financial statements. Questioned costs: No questioned costs were identified. Prevalence or consequence: Partial reconciliation of loan balances was performed, however the full reconciliation was completed during the audit process. Repeated audit finding: This is not a repeat finding. Recommendation: We recommend that reconciliations of loans receivable be completed on a monthly basis including identifying and correcting all reconciling items. The reconciliations should be reviewed and approved by management.