Section II – Financial Statement Findings (Continued)
Criteria or specific requirement: Internal controls are critical to ensure accurate financial reporting. These would include, but not limited to, reconciling statement of net position accounts monthly, a formal process of procedures and internal controls to ensure timely and accurate year-end financial statements and related notes and providing supporting audit documentation that reconciles to the trial balance under audit on a timely basis.
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. As a result, users of the financial statements could make decisions based on financial results that are not complete and accurate.
Cause: Certain cash accounts were not reconciled timely which caused material adjustments.
Repeat Finding: Yes, 2022-002.
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.
2023 – 003 – Debt and Lease Accounting
Type of Finding:
Condition: Debt and lease liability general ledger accounts were not reconciled to supporting schedules. Accrued interest on the liabilities were incorrectly calculated. As a result, material entries were made to correct debt and lease balances.
Criteria or specific requirement: Internal controls are critical to ensure accurate financial reporting. These would include, but not limited to, reconciling statement of net position accounts monthly, a formal process of procedures and internal controls to ensure timely and accurate year-end financial statements and related notes and providing supporting audit documentation that reconciles to the trial balance under audit on a timely basis.
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.
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