Salem Township Hospital

Account Reconciliations and Audit Adjustments Condition – During the audit, it was noted that account reconciliations are not performed on a routine basis for a number of general ledger accounts, which resulted in a significant number of audit adjustments as well as year-end adjustments to the internal financial statements. Criteria – The presence of accounts in an organization’s general ledger that are reconciled only annually or not routinely throughout the year, and the significant inconsistent reporting between the monthly financial statements and annual audited financial statements, are considered an internal control weakness. Effect – Account reconciliations help to ensure that amounts recorded on the general ledger are accurately stated. A lack of account reconciliations can cause numerous audit adjustments and significant differences in financial reporting. Accurate financial reporting is essential for business planning and review of financial information throughout the year. Recommendation – We recommend the Hospital put into place procedures for reconciling key general ledger accounts on a routine basis throughout the year, as well as develop processes to review the reconciliations on a routine basis. Management’s Response – The Hospital hired a new Chief Financial Officer subsequent to the year ended March 31, 2023, and the new Chief Financial Officer has begun implementing policies and procedures to reconcile key accounts on a routine basis throughout the year.