Finding Text
Bank Reconciliation Condition: The bank reconciliations performed as of September 30, 2022 were not reconciled to the general ledger. Criteria: Bank reconciliations should be prepared at the end of each month, for each bank account and agreed to the general ledger. Cause: Transfers of cash between bank accounts were not properly reconciled at the end of the fiscal year. Effect: The combined bank reconciliations balances exceeded the general ledger cash balance by $54,588 as of September 30, 2022. As a result, the overall cash balance is understated. Recommendation: I recommend that bank reconciliations should be reconciled to the general ledger on a monthly basis and proper due to and due from accounts be established to account for the transfers. Performing these procedures will reduce the risk of an overdrawn or overstated bank balance, during the fiscal year. Views of Responsible Officials and Planned Corrective Actions: Springfield MHA will revise standard operating procedures so that bank reconciliations for the month of September of each fiscal year-ended September 30 will reflect balances in intercompany accounts receivables and intercompany accounts payables reported in accordance with HUD Accounting Brief 14 on the Financial Data Schedule as reconciling items on the bank reconciliations. For this fiscal year-end September 30, 2022, the reporting of such balances in accordance with HUD Accounting Brief 14 was only documented on trial balance worksheets that document mapping between trial balance numbers and the Financial Data Schedule. In addition, the Authority will implement controls to ensure all reconciling items are clearly documented on bank reconciliations performed monthly.