Finding Text
Monthly Reconciliation and Closing Procedures
Material Weakness
Condition: Our audit procedures revealed that there is currently no process to ensure that monthly account reconciliation procedures take place. As a result, we proposed over 50 adjustments to the original trial balances.
Criteria: Adequate internal control functions over the financial reporting process.
Cause: Oversight by management.
Effect: Opportunity for misappropriation of assets and that a misstatement of the Organization's financial statements will not be prevented, or detected and corrected, on a timely basis.
Recommendation: We recommend that a detailed monthly checklist be developed to outline all necessary month-end closing procedures needed, including the individuals responsible for preparing and reviewing the items. As part of this checklist, each statement of financial position account should be accompanied by an account reconciliation which agrees to the general ledger. This will help improve internal controls over financial reporting.
View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.