Finding Text
Criteria:
Government Auditing Standards require proper internal control over financial reporting for governmental entities. In an effective control environment the District’s general ledger should be reviewed at least monthly to determine that all funds are complete and in balance, all bank accounts are reconciled, all transactions are properly recorded and supported by documentation, all accounts and related transactions are reasonable as to amount and balance status and all expenditures are within the budget.
Condition:
The District’s books were not maintained and reviewed on a timely basis. The books contained numerous errors, transactions not properly recorded, accounts with incorrect balances and expenditures exceeding the budget.
Cause:
The District’s personnel were not performing their duties of maintaining the District’s financial records to ensure accuracy and completeness, and a lack of proper oversight by management contributed to this failure.
Effect:
The general ledger contained numerous errors and did not accurately reflect the District’s finances. Internal control over financial reporting was not effective.
Auditor’s Recommendation:
The general ledger should be reviewed for completeness and accuracy, bank accounts should be reconciled, expenditures should be monitored to assure that they are within the budget and any necessary corrections should be made in a timely manner.
Management's Response:
The District will implement procedures to ensure that the District’s personnel review the general ledger, that bank accounts are reconciled, that expenditures are compared the budget and that adjustments are made as needed. Additional staff or outside assistance will be engaged as needed.