MENTAL HEALTH MENTAL RETARDATION AUTHORITY OF BRAZOS VALLEY

Criteria: A properly designed system of internal control over financial reporting includes timely reconciliations of balance sheet accounts on a monthly or quarterly basis, depending on the account. Comprehensive reconciliations should include sub-ledger or alternative system documentation that supports and justifies the balance within the account as reflected in the general ledger and demonstrates a roll forward from the prior period which ties to the transactions recorded in the general ledger, and ensures any reconciling items are timely addressed and cleared. Balance sheet reconciliation which simply demonstrate debits and credits that make up the balance of the account do not demonstrate the needed criteria to justify balances. Condition: The Center did not consistently complete balance sheet reconciliations which were accurate, and that adequately justified the balances within the account throughout the year or at year end close. These were completed only for the audit and some were not completed until January 2026. Cause: The Center experienced significant change over the past couple of years, including turnover in some key accounting and IT positions. Current personnel are still in the process of being trained and becoming familiar with new software programs. The complexities of its operations and the amount of change has caused the Center to lose focus of essential accounting activities required to produce timely and accurate financial statements. Effect: The production of audit schedules at year end were substantially delayed as a result of reconciliations having to be completed or corrected. Because of the delay in having timely reconciled general ledger accounts, management made several adjustments in preparation for the audit. This delay may put the Center at risk of not having the audit completed by the due date. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all significant general ledger accounts are reconciled on a timely basis, as is appropriate for the account, in a manner that supports the account balance, with any reconciling items being addressed in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.

Criteria: A properly designed system of internal control over financial reporting includes timely reconciliations of balance sheet accounts on a monthly or quarterly basis, depending on the account. Comprehensive reconciliations should include sub-ledger or alternative system documentation that supports and justifies the balance within the account, demonstrates a roll forward from the prior period which ties to revenue (where applicable), and ensures any reconciling items are timely addressed and cleared. Balance sheet reconciliation which simply demonstrate debits and credits that make up the balance of the account do not demonstrate the needed criteria to justify balances. Condition: The Center did not consistently complete balance sheet reconciliations which were accurate, and that adequately justified the balances within the account throughout the year or at year end close. These were completed only for the audit. Cause: The Center experienced significant change over the past couple of years, including turnover in some key accounting and IT positions. Current personnel are still in the process of being trained and becoming familiar with new programs and the prior year implementation of new software. The amount of change has caused the Center to lose focus of core activities required to produce timely and accurate financial statements. Effect: The production of audit schedules at year end were substantially delayed as a result of reconciliations having to be completed or corrected. Because of the delay in having timely reconciled general ledger accounts, management made several adjustments in preparation for the audit. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all significant general ledger accounts are reconciled on a timely basis, as is appropriate for the account, in a manner that supports the account balance, with any reconciling items being addressed in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.

Condition: Certain general ledger accounts were not analyzed and reconciled on a timely basis. Criteria: Internal controls should be in place to ensure that all material general ledger accounts are critically analyzed and reconciled on a monthly or quarterly basis. Cause: The Center experienced turnover in some key accounting and IT positions. Additionally, there were new programs and an implementation of new software and current personnel are still in the process of being trained and becoming familiar with the programs. Effect: Because of the failure to have timely reconciled general ledger accounts, several adjustments had to be made during the audit process. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all material general ledger accounts are reconciled on a monthly basis. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.