Cornerstone Jefferson-Douglass AcademyLocal Government

Finding Type: Material Weakness (Repeat Finding) Criteria The Academy’s internal control structure should ensure that the accounting data is appropriately calculated, reconciled, and reported in accordance with generally accepted accounting principles. Condition The Academy’s account balances required significant adjustments to the general ledger to properly reflect the appropriate balance after the books and records were presented for audit. Cause/Effect While the accounts were reconciled throughout the year, the reconciliations completed had certain instances where the year-end reconciliation process didn’t match the general ledger. Recommendation The Academy should institute monthly and yearly closing procedures to ensure that all accounts are reconciled and match the general ledger.

Finding Type: Material Weakness (Repeat Finding)Criteria The Academy should have appropriate overall monitoring of the general ledger to ensure timely and accurate financial statements. Condition The Academy lacked appropriate overall monitoring of account balances during the year to compile complete and accurate financial reports that resulted in many auditor-proposed journal entries. Cause/Effect The Academy did not identify the resources necessary to ensure general ledger accounts were monitored and analyzed by appropriate individuals, including taking an overview of fund activity to finalize the accounting records. As a result of the lack of appropriate overall monitoring procedures, there we many auditor-proposed journal entries. Recommendation The Academy should develop an overall monitoring procedure to ensure that all fund activity is complete, accurate, and logical. This includes assigning an appropriate individual to each general ledger account and several individuals be responsible for the entire general ledger and financial statements to perform monitoring, analytical analysis, and adjustment as needed.

Finding Type: Material Weakness and Material Noncompliance (Repeat Finding) Criteria There should be a process in place to ensure that the Academy complies with laws and regulations. Condition There were instances identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits are submitted by November 1 to the Michigan Department of Education. Cause/Effect There was a change in staff and staff shortages which led to noncompliance with MCL 388.1718. Recommendation We recommend that the Academy implement a process that identifies specific individuals for identifying and monitoring applicable compliance requirements throughout the year.