Finding Text
Description: Year-End Cut-Off Procedures
Criteria:
The Committee of Sponsoring Organizations of the Treadway Commission issued its updated Internal Control – Integrated Framework in May 2013. It defines internal control as, “a process, effected by an entity’s board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting and compliance.”
Condition:
We noted the following conditions:
• Invoices related to the year under audit were not accrued in the appropriate time period.
• Revenues from two grants for which conditional terms were met were not recognized in the financial statements.
Cause:
Year-end cut-off procedures for some accounts were not fully completed.
Effect:
• Internal financial records were not accurate.
Recommendations:
• We recommend that management complete reconciliation processes to ensure recognition of financial activity in the appropriate period.
Views of Responsible Officials:
Management acknowledges the recommendation and has started implementing controls consistent with the recommendation.