Finding Text
Criteria: The financial statements are the responsibility of the organization?s management. Condition: During our audit, material adjustments were needed to correct the recording of various asset, liability, revenue, and expense accounts. Cause: While reconciliations are being performed, it was noted during the audit that some of them were incomplete and/or incorrect. In addition, there was also an issue related the cutoff and the recording of accounts payable. Effect: This indicates that it would be likely that a misstatement may occur and not be detected by the organization?s system of internal control. The audit firm cannot serve as a compensating control. Repeat Finding: This is a repeat finding, see finding 2021-001 in the prior year report. Recommendation: We recommend management perform monthly reconciliations of the general ledger accounts, both in general and to the governmental grant reporting forms. Responsible Official?s Response: Management agrees with the finding and the recommendation. The issue identified occurred during a transition of the organization?s staff accountant. After completion of the prior year audit, Management developed and implemented new procedures for the monthly reconciliation process that reconciles the general ledger to the government grant reporting forms. Additionally, the organization is in the process of transitioning controller responsibilities to a third-party financial services firm.