Effect: The potential effects of the above matters are that interim and year end information may contain errors that may not be detected and corrected on a timely basis. As a result, users of the financial statements could make decisions based on financial results that are not complete and accurate.
Cause: Formal policies and procedures requiring monthly or quarterly close procedures does not exist and a comprehensive business procedures manual has not been completed.
Repeat Finding: Yes, 2023-001.
Recommendation: We recommend management implement a monthly or quarterly close policy that identifies the accounts that are to be reconciled and adjusted during this process and finalize a business procedures manual.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Type of Finding:
Material Weakness in Internal Control over Financial Reporting
Condition: Bank reconciliations are not performed on a timely basis.
Criteria or specific requirement: Internal controls are critical to ensure accurate financial reporting. These would include the performance and review of bank reconciliations shortly after the receipt of a bank statement each month.
Effect: The potential effects of the above matters are that interim and year end information may contain errors that may not be detected and corrected on a timely basis, as well as misappropriation of cash not being detected on a timely basis.
Cause: Certain cash accounts were not reconciled timely.
Repeat Finding: Yes, 2023-002.
Recommendation: We recommend that cash reconciliations be completed and reviewed, no later than a month after the period being reconciled and any required adjustments be made timely within the general ledger.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.