Finding Text
During the current year audit, material journal entries were needed to correct the beginning balances of various asset, liability, and equity accounts. We also noted, that the School was unable to identify the receipt of the federal IDEA funding receivable from fiscal year 2023, which was passed through the Montgomery County Intermediate Unit. This funding from 2023 was received in 2024; however, the client was unable to determine where the payment was posted. This resulted in federal receivables being overstated on the unadjusted trial balance. As a result, material adjustments were needed to correct the current year ending balances of accounts receivable, IDEA revenue, and interest income. The internal controls over financial reporting did not function properly and did not properly reconcile beginning account balances to the prior year audit report or current year receivable, IDEA revenue, and interest income balances. These changes also resulted in the School making periodic changes to the trial balances provided for the audit.