Finding Text
Finding #2022-004 ? Lack of Financial Close Process and Delayed Accounting (Prior Year Finding #2021-004) Condition: Cash and other accounts were adjusted during the audit process. Many audit journal entries were required to record and adjust activity. During the year and as of June 30, 2022, cash balances on the general ledger had unreconciled differences compared to the bank balances. Accounting processes were delayed. January 2022 through June 2022 bank reconciliations were performed in August 2022. Many significant 2022 cash receipts and disbursements weren't recorded on the general ledger until August 2022. Instances were identified where payments of certain payroll withholdings and employer benefits were delayed until several months after the related payroll dates. Effect: Financial reporting from the District?s general ledger could be materially misstated. Not remitting payroll withholdings and benefits when due will lead to penalties and payroll liabilities increasing on the District?s general ledger. Cause: The District did not have procedures in place to ensure that all transactions were properly recorded on the general ledger prior to the audit. Dates for payments to be made on payroll liabilities were not always being tracked and payroll liability accounts were not being reconciled. Criteria: Cash and other accounts should be timely reconciled. General ledger cash balances should be reconciled to the monthly or quarterly bank statements. During the close of the monthly financial statements, other balances should be reconciled to subsidiary detailed listings. Payments for payroll liabilities should be paid timely. Payroll liability accounts should be reviewed to ensure withholdings, accruals, and payments are properly clearing the liabilities. Recommendation: The District should develop procedures to timely reconcile cash and other balance sheet accounts. The reconciliations should be reviewed by someone other than the person preparing the reconciliations. The reviewer should initial and date the reconciliations when the review is complete. Develop procedures to monitor when payroll liability payments are due. Reconcile the payroll liabilities to ensure that the payments are being made within the appropriate period. Response: The District will work to establish procedures to reconcile accounts monthly and ensure payroll amounts are remitted on time. To assist with business operations, the District contracted for additional business office services for the 2022/2023 school year.