Finding Number: 2023-002 Closing Process – (Material Weakness)
Planned Corrective Action: The auditors noted issues related to the timeliness of the financial statement close process, the quantity of entries to close the books, the reconciliation of the beginning trial balance to the prior year audited trial balance, and a lack of segregation of duties which led to journal entries being prepared, reviewed and posted by the same person in the general ledger system.
The issues noted were largely the result of significant turnover within the Finance Department, including the departure of the former head of the department without a proper transfer of institutional knowledge to remaining staff or incoming leadership. Since that time, oversight has improved considerably, and key processes have been reviewed, updated, and formally documented.
While the current size of the Finance Team necessitates that the same individual generally enters and posts journal entries, we have implemented compensating controls that we believe are appropriate given the assessed levels of risk and materiality. These controls include role-specific responsibilities for journal entries and reconciliations. For example, with respect to cash activity, different team members handle cash receipts, disbursements, and inter-account transfers. A fourth team member is responsible for preparing the monthly bank reconciliations, which are then formally reviewed and signed off by Fiscal Department management, including the CFO.
Management remains committed to strengthening internal controls, maintaining adequate segregation of duties to the extent practicable, and continuing to enhance the overall financial close and reporting process.
Person Responsible: The Executive Director and Chief Financial Officer
Completion Date: April 30, 2025