Finding Text
Criteria
Management is responsible for timely and accurate financial reporting.
Condition
Various reconciliations, adjustments and year-end close procedures were not completed in a timely and accurate manner which resulted in delay of completion of the annual audit for the 2023 audit period and untimely filing of the required single audit data collection form.
Cause
Turnover in key finance staff and management positions occurred at year end impacting the year-end reconciliation and close processes.
Effect
Delays in completing various reconciliations, year-end close process, and audit submissions to the State of New Jersey and federal audit clearinghouse. Preliminary account balances were also materially misstated requiring multiple audit adjustments.
Recommendation
We recommend that the Agency review its general ledger system to determine if a system exists that is more aligned with the Agency’s basis of accounting and accounting needs. Additionally, we recommend that all activity, journal entries, and any correcting adjustments be recorded to the general ledger using the accrual basis at the time of the transaction, which will allow for a timely completion of reconciliations and the year-end close process. We also recommend that the Agency look to hire a qualified accounting professional that can keep the books and records up to date on a monthly basis.
Management’s Response
Management has reviewed the finding above and will complete a corrective action plan within 45 days of the report.