2023-001 - Material Weakness - Material Adjusting Journal Entries
WPHW understands this finding and recognizes that corrections that were planned for FY23 did not come to fruition. WPHW was in the process of implementing a new financial management system, NetSuite. It was our plan to implement new processes that would have fully addressed prior concerns. It was our plan to have the FY23 audit completed in both NetSuite and QuickBooks. However, we encountered several issues with the implementation of the new system, which delayed prior year corrected actions. In May 2024, WPHW decide to no longer work with NetSuite, due to the number of issues with the system and the company. Since that time, we have fully committed to QuickBooks and have started engaging in systematic business process redesign of our financial system.
At the time of the transition back to QuickBooks fully, we also made significant staff role changes. Our accounting department now has a Director of Accounting and two new managers, AR/AP Manager and Accounting Manager. With these new positions, we have developed the following procedures for adjusting journal entries:
1) Accounting Director, Accounting Manager or AR/AP Manager identifying need for a journal entry
2) Accounting Specialist or AR/AP Specialist pulls the supporting documentation for the required entry, creates journal entry template in Excel, and prepares journal entry packet with supporting documentation for entry into QB.
3) Accountant or Accounting Manager reviews packet and determines who can enter journal
a. If reviewed by Accountant, entry is entered QuickBooks by Accounting Specialist
b. If reviewed by Accounting Manager, entry is entered into QuickBooks by Accountant
4) Once journal entry is entered into QuickBooks, entry is printed from QB system and added to packet. The packet is returned to the preparer to ensure all elements were completed corrected and signed off on
5) Completed packet goes to filing and are scanned into our electronic file system
All adjustments must go through three different individuals to ensure separation of duties. This process will be implemented during Q4 of FY24. The Director of Accounting will go back over all the journals completed before this date to review how each were completed and delegate additional review to the Accounting Manager and Accounting Specialist to ensure each journal entry had appropriate review and support. With this process in place, we anticipate this issue being fully resolved in FY25.