CACC evaluates audit findingsPublished 11:24am Saturday, November 3, 2012
Money may have been mislabeled, but it’s not missing – that’s what Central Alabama Community College officials said of the college’s most recent audit.
“There is no money missing or anything like that – they made that clear in the audit,” said Lynn Spraggins, dean of business operations. “The old system – the system we have had for 20 years – just had some issues. You have a bunch of accounts (subsidiary ledgers) that feed into the general ledger, but we had it posting items in one but not the other.”
The Alabama Department of Examiners of Public Accounts identified three subsidiary ledgers that did not match up with the general ledger, in the audit that was performed in June of this year.
The cash balances subsidiary ledger was initially found to be $7,238,008.40 less than general ledger, the accounts receivable subsidiary ledger was $1,084,732.81 more than the general ledger and the student accounts was $11,518.24 more than the general ledger.
Most of the discrepancies in the cash balance and accounts receivable ledgers were due to the previous year’s balance not being rolled forward, Spraggins said.
“When we close out a fiscal year, it automatically takes the ending balances on all of our accounts – all of our assets and liabilities – and rolls them over into the new year,” Spraggins said. “The balances didn’t show up in the subsidiary ledger, but they were actually in the general ledger.”
Without the amounts that should have rolled forward, $12,524.81 of the cash balances ledger and $43,471.58 of the accounts receivable leger could still not be identified.
“The difference is money that still hasn’t been identified as what it is – it might be a deposit in transit, outstanding checks or something miscategorized,” Spraggins said.
The audit said that all of the problems were identified as deficiencies in internal control. The Department of Examiners describes a deficiency in internal control as when “the design or operation of a control does not allow management or employees … to prevent or detect or correct misstatements on a timely basis.”
Furthermore, the department described the problems as material weaknesses, meaning there is a reasonable possibility of future problems.
The audit also found other problems – lack of accurate and timely reconciliations of bank statements, financial reporting not in conformity with accounting principles, unrecorded accounts payable, internal control of segregations of duties and journal discrepancies.
Spraggins said the college is in the process of fixing the problems discovered.
“We are still working on bank statement reconciliations, but it’s coming along,” Spraggins said. “We have to go back in our computer system and see where it double posted or didn’t post in order to make corrections and take care of that.”
Spraggins said that moving forward, the college’s new computer system Banner will prevent these problems from happening in the future. Banner was put into place July 23.
“Banner is going to take care of a lot of the problems we have had in the past,” Spraggins said. “We began our fall semester on Banner, and two weeks later we started accepting payments on Banner. Finances, bookkeeping, and the general ledger didn’t go live until Oct. 1. It’s going to be a good system.”