Finding Text
Finding 2022-001 Account Reconciliations Condition: During our audit procedures, we discovered that account reconciliations were not performed to adjust balances to agree with supporting documentation for a number of general ledger accounts at June 30, 2022. Criteria: In order to properly state account balances, the Organization should routinely review and reconcile the consolidated statement of financial position accounts. Cause: There was significant turnover in the finance and accounting department during the year and the team currently holding the CEO, CFO, and accounting assistant positions did not start with the Organization until after year end. As a result of this turnover, the accounts were not reconciled timely. Effect: This resulted in nine adjusting journal entries as a part of the audit of the consolidated financial statements. Perspective Information: The fiscal year ended June 30, 2021 Single Audit was not issued until March 17, 2022, which left the finance and accounting staff less than four months left in the current year under audit to correct this matter before the end of the next fiscal year. Indication of Repeat Finding: This is a repeat finding of 2021-001. Recommendation: The Organization should adopt a policy requiring monthly reconciliation of all consolidated statement of financial position accounts to their supporting documentation in order to ensure the accuracy of the monthly financial statements. Consolidated statement of financial position reconciliations quickly identify errors and necessary corrections. If reconciliations are performed infrequently, errors and adjustments can occur, resulting in the need for significant corrections when the reconciliations are performed. Any reconciling differences should be corrected before the accounting records are closed for the month end. Views of Responsible Officials: Management agrees with the finding and has processes in place to ensure that all accounts related to monthly financial statements are reconciled monthly, prior to monthly financial close. This process was implemented effective January 1, 2022.