Finding Text
Books and Records Not Kept on Accrual Basis of Accounting. Condition and context: Management did not keep AJAC's books and records on the accrual basis of accounting. Effect or potential effect: Total revenue was adjusted by approximately $762,000. Cause: General ledger account reconciliations were not performed and reviewed monthly. Criteria: Uniform Guidance 2 CFR 200 Subparts D and E requires accounting books and records to be kept on the accrual basis of accounting in accordance with generally accepted accounting principles (U.S. GAAP), which requires revenues be recognized when earned and expenses recorded when incurred. Recommendations: We recommend management keep the accounting books and records on the accrual basis of accounting. We recommend management review and revise current accounting policies and procedures to ensure that all general ledger accounts are reconciled and reviewed monthly. Responsible official's response: AJAC implemented monthly account reconciliations and review by AJAC Directors and Supervisors, this will ensure that the accounting books and records are kept on the accrual basis of accounting.