Finding Text
2023-001 Closing Records on a Timely Basis
Condition: Accounting records were not closed for over six months after the end of the fiscal year.
Criteria: In a properly functioning internal control environment, accounting records are reconciled and closed within a reasonable time after the end of each accounting period.
Cause: The finance team was not adequately staffed to manage the size and complexity of the organization, resulting in extended timelines to complete certain finance and accounting tasks.
Effect: If records are not timely-closed, management and board of directors may be making decisions based on incomplete information.
Auditor’s Recommendation: We recommend the Organization implement procedures to ensure accounting records are reconciled and financial statements completed within 90 days after the end of each period to allow management and the Board to make informed decisions.
Grantee Response: The Finance Team has developed and deployed a comprehensive month-end close process that includes:
• A detailed procedural checklist with clearly defined responsibilities
• Specific deadlines for each critical task in the close sequence
• Formal approval requirements at key control points
• A targeted completion timeline of 30 days post month-end
To support this enhanced process, we have strategically increased resources within the finance function, including additional staff allocation to high-priority areas. Furthermore, we are conducting a thorough assessment of automation opportunities throughout our accounting workflow to improve efficiency, reduce manual processing, and accelerate the completion of key accounting tasks.