Effect: Material audit adjustments were required to be made to unadjusted balances.
Cause: The University did not have supporting subledgers supporting grants receivable and unearned revenues by invoice or grant. Within the general ledger, all receivable activity is recorded to two accounts, one with a material debt balance and one with a material credit balance, which was not reconciled to a detailed listing of receivables. There were balances in unearned revenues and grants receivable that should have off-set one another.
Recommendation: We recommend that the University support grants receivable with a detailed listing by funding agency and invoice and unearned revenue be supported by a detailed listing by grant.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Type of Finding:
Condition: Prior year audit entries were not correctly posted to the general ledger which led to beginning net position balance not agreeing to the audited ending net position balance of the prior year.
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: Significant analysis was conducted, and material audit adjustments were recorded to correct beginning net position.
Cause: The University did not accurately post fiscal year 2022 audit adjustments in the correct year in the trial balance.
Recommendation: We recommend that the University establish procedures to ensure that audit adjustments and closing entries are properly posted to the general ledger.
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