Finding Text
Condition: During the audit process, we noted an instance where there was a lack of control over cash management. The situation involved the dating and issuance of a check near year end. The check was written and dated on September 27, 2023 and was correctly included as an outstanding check on the September 30, 2023 bank reconciliation. This check date was later changed to October 1, 2023 in the Organization’s general ledger, which is after the Organization’s fiscal year end.
Effect: A control deficiency exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions to prevent or detect misstatements on a timely basis. This could affect the Organization’s ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements.
Cause: The management agent is unsure why the check date was changed in the general ledger after the check was originally written and issued.
Criteria: The Organization should have procedures in place to make sure there is adequate review of general ledger activity, and these procedures must be followed to ensure all payments are recorded correctly.
Recommendation: We recommend that the Organization verifies that payments are recorded in the correct period and not changed in the general ledger after the checks are written.
Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding and
the auditor’s recommendations will be adopted.