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RNV Reconciliation Findings

RNV Reconciliation Findings. Sept-5-2011. Current Situation. In November 2010 a mistake by the information systems team resulted in write-off transactions in Oracle being duplicated which created confusion during the close process about the true company liability

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RNV Reconciliation Findings

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  1. RNV Reconciliation Findings Sept-5-2011

  2. Current Situation • In November 2010 a mistake by the information systems team resulted in write-off transactions in Oracle being duplicated which created confusion during the close process about the true company liability • Over the course of the next two quarters the IS, Cost, AP, and GL teams worked to understand and address the issue from a financial reporting perspective • Ultimately a reconciling item of $1.818 million was added to the report value of the Accrual Reconciliation Summary Report to balance to the General Ledger • The accrual reconciliation summary report includes both the purchase order accruals, consignment accruals and the write-offs associated with each • Further analysis was conducted to identify permanent corrective actions for this problem

  3. GL/RNV Reconciliation • There are three components to reconcile • GL balance • SLA balance (sub ledger) • RNV (received, not vouchered) The actual outstanding liability for the company is believed now to be $4.3 million $40k variance (combination of minor differences) Net write-offs since November 2008 to 31-Aug-2011 Confirmed not to have been paid. Needs to be written back on. To be corrected – this is due to a technical error and is being investigated

  4. GL/RNV Reconciliation Corrective Actions Both the GL and SLA balances need to be corrected by 2.687 (2.553 + 0.134) to reverse the write-offs and arrive at the valid $4.3 balance. This can be achieved by a manual entry in the sub-ledger which will automatically then flow through to the GL. The RNV report will be corrected by a manual entry of $0.140 million as a reconciling line Other key points • The net impact of consignment write-offs since July 2011 is zero due to procedural changes • The 0.735 “Other Write Offs” is not relevant to liability to suppliers – these are manual journal entries • Making a consignment accrual account distinct from the PO accrual account provide better controls and clear visibility to future issues if the occur $2.687 Correction $0.24 manual entry

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