Finding Text
Condition: Numerous data entry errors occurred during the year where incorrect check numbers were
entered into the accounting system. There were also multiple gaps in sequence in the check register.
This should have been discovered during the bank reconciliation process (review of canceled check
images) but was not. Bank statements were not reconciled correctly on a timely basis, and lists of
outstanding checks were not included with the approved bank reconciliations.
Criteria: The Code of Federal Regulations (CFR) § 200.303 requires the organization to establish and
maintain effective internal control that provides reasonable assurance that the organization is managing
federal awards in compliance with federal statutes, regulations, and the terms and conditions of the
federal award.Cause: The Organization experienced significant staff turnover during the year.
Effect: Internal controls over operating cash were deficient. Bank reconciliations had to be
reperformed after year-end by the new Accountant.
Recommendation: Bank reconciliations should include details (list of outstanding items) and be
reviewed on a monthly basis. Any gaps in check sequence, stale-dated items and other unusual items
should be followed up on and investigated. Bank reconciliations should be done in a timely manner
(generally within 30-45 days after month-end).
Views of Responsible Officials: Management concurs. See Corrective Action Plan.