A recent routine audit of the Dakota College at Bottineau revealed a significant issue with the school’s accounting records.
The audit looked at a four-month period between July 1, 2022 and June 30, 2024. State auditor Josh Gallion says it was found that monthly bank reconciliations were not being completed correctly. He says cash balances in accounting records should match those reported by the bank, which helps reduce the risk of fraud and errors.
"The differences between the bank records and the general ledger ranged from negative, you know, several hundred thousand, to positive $800,000. And so we do see a significant range; those unreconciled differences, we were also unable to track down some of the supporting documentation for those as well, so some of those transactions were not documented. So it raises some concerns on financial management."
Gallion says Dakota College at Bottineau will now have the opportunity to respond with corrective actions. He says DCB says they want to work with Minot State University to gain assistance and training on conducting the bank reconciliations needed. He says another audit will be conducted in two years.
Gallion says these issues with DCB’s bank reconciliations are crucial to correct so the institution can make sound financial decisions in the future.
"Bank reconciliations, I mean, this is accounting 101. These are the basics. Having proper internal controls, proper documentation, reconciling those to zeros every month between the accounting ledger and the bank statements - it provides assurance not only to the taxpayer but also makes sure the decision makers at the organization have good financial data to support the decisions they need to make."
It has been recommended DCB perform monthly bank reconciliations to a zero-dollar difference for all accounts moving forward.