Finding Text
Finding 2023-001: Invalid Journal Entries (Compliance)
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. We identified several errors related to inaccurate
payroll accruals and negative payroll allocations within funds. This required the Organization to adjust
payroll costs based on accurate accruals and to eliminate negative payroll allocations within funds. These
adjustments resulted in a $45,320 reduction in payroll expenses charged to the major program.
Cause: There was inadequate review of 2023 balances during the year-end close process.
Effect and Questioned Costs: The effect of these deficiencies in internal controls was known questioned
costs of $45,320 charged to the major program. This resulted in over payment of federal funds to the
Organization in the amount of $45,320. The potential effect of these deficiencies is the misstatement of
federal expenditures reported on the Schedule of Expenditures of Federal Awards and the noncompliance
with Allowable Activities and Allowable Costs requirements per the Compliance Supplement.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to submitting
reimbursement requests for federal programs.