Finding Text
Type of Finding: Material Weakness in Internal Control over Financial Reporting
Criteria or specific requirements: Management should have a review process in place to ensure accounts
are reconciled to supporting ledgers on a timely basis.
Condition: Accounts receivable were not reconciled to the subsidiary ledgers.
Effect: Gross accounts receivable was overstated.
Cause: Management does not have a process in place to track the reconciliation of its accounts.
Repeat Finding: No
Recommendation: Management should maintain a listing of account reconciliations to be completed as
part of its monthly close process.
Management’s Response/Views of Responsible Officials: The adjustment to accounts receivable, was due
to amounts written-off as uncollectable in the subsidiary ledger that was not carried over to the general
ledger on a timely basis, due to a change in personnel. The amounts were covered in the Organization’s
reserve for doubtful accounts. Management has implemented a process to ensure that balance sheet
accounts are reconciled monthly.