ORRVILLA MANOR 1, INC.

2020-01 Type of Finding: ? Material Weakness in Internal Control over Financial Reporting Condition: The organization did not complete various monthly accounting procedures during the year under audit, such as completing monthly bank reconciliations, including a lack of review, creating monthly internal financial statements for the Board of Directors to review, and not having formal controls in place over the bank access given to the accountant, including check signing privileges and the ability to take funds to the bank. Criteria or Specific Requirement: These accounting procedures should be in place to provide reasonable assurance that the Organization is able to detect and correct errors, misstatements, and fraud in a timely manner. Context: It was noted that the Organization had been delayed in performing these accounting procedures or had not implemented appropriate control processes over these accounting procedures, which creates a higher risk of errors, misstatements, and fraud to occur without detection or correction. Effect: The lack of these accounting procedures increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: Much of this occurred due to the significant turnover in the accounting department in the current year and the newly hired accountant working to catch up and get the records to a current state. Recommendation: The Organization has hired a new account that has the applicable skill and expertise to ensure that these accounting functions are completed on a monthly basis. We recommend that the Executive Director and members of the Board of Directors closely monitor the ongoing accounting activities performed to mitigate the risk that accounting functions do not stop or become delayed. Additionally, we recommend that the accountant's banking privileges and review over these banking processes be reviewed to ensure appropriate control structure are put in place.