Finding Text
Accounts Reconciliation - Statement of Criteria: A sound accounting system requires that the financial statement accounts are recorded and reconciled in an accurate and timely manner. Statement of Condition: A significant number of general ledger accounts were not reconciled to the underlying supporting documentation resulting in a significant number of audit adjustments being made as part of audit procedures. Statement of Cause: Over the last three years the organization has experienced rapid growth and diversification. Most of this growth and diversification occured as our Chief Financial Officer (over 20 years of service) was in the process of retiring and we were in the process of hiring a new one. As a result, the organization lost much institutional memory and found itself focusing on building toward the future. Growth and diversification include: a merge that occured on 7/1/2022 allowing us to gain a footprint in Massillon, Toledo, and Upper Sandusky Ohio, the establishment of a Social Enterprise (Cadence Coffeehouse and Creperie), and the award of the OhioRISE Contract with Aetna. The sheer scale of these operations challenged our financial department and CFO hired to replace our longstanding CFO. This growth can be evidenced by our rapid fiscal growth in both income and assets during the time period. As a result of these shortcomings and this cause, the former CFO is no longer employed at the organization. A new CFO was hired on April 8, 2024. New procedures were implemented quickly upon his hire. Effect: Because of these instances noted above, a significant number of general ledger accounts were not reconciled to the underlying supporting documentation, resulting in a significant number of general ledger accounts being mistated. This led to a significant number of audit adjustments being made. Unreliable general ledger account balances make it more difficult for the governance board to make decisions based on monthly financial statements. Recommendation: Management should formalize monthly accounting and closing procedures to include reconciliation of all significant account balances and to ensure accurate financial reporting information is being maintained by the Organization.