Finding 961768 (2023-002)

Finding 2023-002 - Journal entries Criteria: The District is required to maintain a general ledger and to include adjusting journal entries as necessary on a timely basis, to prevent the combined financial statements from being materially misstated. Journal entries are to be made, when appropriate to adjust balances, including those relating to the federal and state grant assistance programs. Condition: During the audit several material journal entries were proposed. These entries would have a material effect on the combined financial statements if not proposed and recorded. We consider this to be a material weakness. Cause: Lack of accounting and bookkeeping regarding the District’s general ledger accounts cause the various journal entries to be proposed. These entries affected various combined balance sheet and expenditure accounts. Effect: The combined financial statements would have been materially misstated if these journal entries were not proposed and recorded. Recommendations: We recommend that the District implements procedures to review the general ledger more carefully, including combined balance sheet and expenditure accounts. This review should include reconciliations so that receivables and payables can be properly recorded on a timely basis. In addition, review of previous adjustments and current account balances should be considered. View of Responsible Officials: Prior leading into this audit, there were two sets of accounting records. The District had their own records separate from the Community Action Partnership of Mercer County. For the fiscal year 2023-2024, the District is now under the Community Action Partnership of Mercer County with one set of accounting records. The general ledger, balance sheet and expenditures are to be reviewed on a timely basis.