Finding Text
Criteria – Those charged with governance are to provide oversight of financial reporting. The Board of Trustees and management need accurate and timely financial reporting to oversee and manage the Hospital.
Condition – The Hospital has procedures for account reconciliations and review and approval by the appropriate authority for transaction cycles; however, the Hospital’s internal controls still failed to prevent, detect, and correct material misstatements in the financial statements. As a result, the Board of Trustees was not receiving accurate and timely financial reporting to use in their oversight of the Hospital, and management were not receiving accurate and timely financial reporting to manage the Hospital.
Context – The Hospital has had significant turnover in its finance department.
Cause – Internal controls are not being followed with sufficient diligence.
Effect – Material misstatements in the financial statements were undetected by management. The Board of Trustees and management were not receiving accurate and timely financial reporting to perform their functions.
Prior Year Finding – In the prior audit period a similar finding, 2022-003, was noted.
Recommendation – The Hospital should evaluate each aspect of its policies and procedures. Individuals responsible for transaction cycles and accounting, and those individuals responsible for review and approval of transaction cycles, should be sufficiently educated and instructed to ensure internal controls are operating effectively.
Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. The Hospital will ensure finance staff are aware of and following its financial policies and procedures.