Finding Text
Separate Trial Balances
Material Weakness
Condition: During the course of the audit, it was noted that the Organization currently utilizes a single trial balance for both NeighborWorks and Southern Colorado Community Lending, which resulted in several adjustments to the general ledger in order to reconcile certain balances between entities.
Effect: Inaccurate financial reporting that compromise the accuracy and transparency of financial reporting between the entities.
Recommendation: We recommend separate trial balances for both parent and subsidiary and regular reconciliation of intercompany balances during month end procedures to improve internal controls over financial reporting.
View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.