Finding Text
Condition
The beginning balances of accounts receivable were overstated in the amount of $296,539 and
the deferred revenue was overstated in the amount of $498,882 on the Schedule of
Expenditures of Federal Awards for the year ended June 30, 2022.
Criteria
The accounts receivable and deferred revenue accounts should be reconciled to their proper
balance in the general ledger on a monthly basis and reported properly on the Schedule of
Expenditures of Federal Awards.
Cause
The finance director was relying on guidance from the prior year auditor and did not verify the
recommended adjusting entries.
Effect
There was a substantial overstatement of accounts receivable and deferred revenue recorded in
the general ledger which caused a substantial overstatement on the Schedule of Expenditures
of Federal Awards.
Recommendation
We recommend that all accounts in the general ledger be reviewed and reconciled to their
proper balance in the general ledger on a monthly basis and be reported property on the
Schedule of Expenditures of Federal Awards.