FAC Explorer

Audit 325037

FY End
2024-03-31
Total Expended
$814,000
Findings
6
Programs
1
Organization: Township of Pointe Aux Barques (MI)
Year: 2024 Accepted: 2024-10-17
Auditor: Nietzke & Faupel PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
503063 2023-001 Significant Deficiency Yes ABFGIL
503064 2023-002 Significant Deficiency Yes ABFGIL
503065 2024-001 Significant Deficiency - ABFGIL
1079505 2023-001 Significant Deficiency Yes ABFGIL
1079506 2023-002 Significant Deficiency Yes ABFGIL
1079507 2024-001 Significant Deficiency - ABFGIL

Programs

ALN Program Spent Major Findings
10.760 Water and Waste Disposal Systems for Rural Communities $814,000 Yes 3

Contacts

Name Title Type
Y5JCR1ZW6LX5 Patricia Gotfredson Auditee
9897386402 Kylie Braun Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reproted on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. Negative amounts (if any) shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Township of Pointe Aux Barques has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the "schedule") includes the federal award activity of the Township of Pointe Aux Barques under programs of the federal government for the year ended March 31, 2023. The information in this schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Township of Pointe Aux Barques, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Township of Pointe Aux Barques. The Township does not qualify for low-risk auditee status. Management has utilized the United States Department of Agriculture (Rural Development) in preparing the Schedule of Expenditures of Federal Awards. The Township does not pass through federal funds.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the schedule are reproted on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. Negative amounts (if any) shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Township of Pointe Aux Barques has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. Negative amounts (if any) shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The Township of Pointe Aux Barques has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 3 - Reconciliation to the Financial Statements Accounting Policies: Expenditures reported on the schedule are reproted on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. Negative amounts (if any) shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Township of Pointe Aux Barques has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal expenditures reconcile to the amounts reported in the Township's financial statements as follows: See the Notes to the SEFA for chart/table
Title: Note 4 - Adjustments Accounting Policies: Expenditures reported on the schedule are reproted on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. Negative amounts (if any) shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The Township of Pointe Aux Barques has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Adjustments were made to expenditures of federal awards due to rounding of USDA draws to the nearest hundred.

Finding Details

Finding 2023-001
Finding: 2023-001 Year-End Accounting Procedures Criteria: It is the responsibility of management to perform the year-end closing procedures and to prepare the appropriate year-end closing entries in order to ensure that the year-end financial statements are not materially misstated. Also, the year-end closing procedures should be supervised and reviewed by Township officials that have an adequate knowledge of the Township’s activities during the fiscal year. Condition: The auditors of the financial statements assisted the Township’s management with the basic year-end accounting procedures that were necessary to prepare the accounting records for financial reporting and audit purposes. This included the preparation of several year-end adjusting entries that were necessary to keep the financial statements from being misstated. Cause: Management does not have the expertise necessary to prepare the year-end adjusting entries or other procedures so that the accounting records are ready for financial reporting and audit purposes. Effect: This situation could allow the misstatement of the financial statements. Perspective: Although this finding is considered to be a significant deficiency, we do not perceive it to negatively impact the audit opinions issued. The Township has engaged the financial statement auditors to perform year-end closing procedures which is a nonattest service. This is a systemic problem that is likely to continue due to the small size of the Township and an overall lack of resources. Recommendation: We recommend that the Township acquire the expertise necessary to complete the year-end accounting procedures and to prepare the Township’s accounting records needed for the audit. Response: The Township acknowledges this situation and agrees that this recommendation would help strengthen internal controls. However, due to the cost of implementing this recommendation, the Township Board believes the cost of obtaining the necessary expertise would out-weigh the benefit. Therefore, the Township will continue to request assistance from its financial statement auditors with its year-end account closing procedures.
Finding 2023-002
Finding: 2023-002 Preparation of the U.S. GAAP Basis Financial Statements Criteria: The responsibility of the Township’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles rests with the management of the Township. Management is also responsible for the system of internal accounting controls used to ensure that the financial statements are not materially misstated. Condition: Along with assisting with the year-end closing procedures to the Township’s accounting records, the financial statement auditors also assisted the Township by preparing the annual financial statements (including related notes). Cause: Management does not have the expertise necessary to prepare the financial statements in accordance with U.S. generally accepted accounting principles. Effect: This situation could allow the misstatement of the financial statements. Perspective: Although this finding is considered to be a significant deficiency, we do not perceive it to negatively impact the audit opinions issued. The Township has engaged the financial statement auditors to prepare financial statements in accordance with U.S. generally accepted accounting principles which is a nonattest service. This is a systemic problem that is likely to continue due to the small size of the Township and an overall lack of resources.Recommendation: We recommend that the Township acquire the expertise necessary to prepare the annual financial statements including the required disclosures in accordance with U.S. generally accepted accounting principles. Response: The Township acknowledges this situation and agrees that this recommendation would help strengthen internal controls. However, due to the cost of implementing this recommendation, the Township Board believes the cost of obtaining the necessary expertise would out-weigh the benefit. Therefore, the Township will continue to request assistance from its financial statement auditors with the preparation of its annual financial statements.
Finding 2024-001
Finding: 2024-001 Budget Amendments Criteria: The Michigan Public Act 621 of 1978 requires governmental units to adopt budgets for all applicable governmental type funds before the beginning of the fiscal year and all budget amendments approved prior to the end of the respective fiscal year. Condition: The Township adopted budget amendments for fiscal year 2024 after the year ended March 31, 2024. Cause: Management did not have all budget amendments related to fiscal year 2024 approved until after March 31, 2024. Effect: This situation results in noncompliance of the Michigan Public Act 621 of 1978. Perspective: While we consider this finding to be an instance of noncompliance with State of Michigan budget requirements, we do not perceive it to negatively impact the audit opinions issued. This appears to be an isolated instance as it has not been reported in prior audits. Recommendation: We recommend the Township approve all budget amendments for their governmental funds prior to the end of the fiscal year. Response: The Township acknowledges the situation and will work to avoid any future issues by amending the budget before the end of each fiscal year.
Finding 2023-001
Finding: 2023-001 Year-End Accounting Procedures Criteria: It is the responsibility of management to perform the year-end closing procedures and to prepare the appropriate year-end closing entries in order to ensure that the year-end financial statements are not materially misstated. Also, the year-end closing procedures should be supervised and reviewed by Township officials that have an adequate knowledge of the Township’s activities during the fiscal year. Condition: The auditors of the financial statements assisted the Township’s management with the basic year-end accounting procedures that were necessary to prepare the accounting records for financial reporting and audit purposes. This included the preparation of several year-end adjusting entries that were necessary to keep the financial statements from being misstated. Cause: Management does not have the expertise necessary to prepare the year-end adjusting entries or other procedures so that the accounting records are ready for financial reporting and audit purposes. Effect: This situation could allow the misstatement of the financial statements. Perspective: Although this finding is considered to be a significant deficiency, we do not perceive it to negatively impact the audit opinions issued. The Township has engaged the financial statement auditors to perform year-end closing procedures which is a nonattest service. This is a systemic problem that is likely to continue due to the small size of the Township and an overall lack of resources. Recommendation: We recommend that the Township acquire the expertise necessary to complete the year-end accounting procedures and to prepare the Township’s accounting records needed for the audit. Response: The Township acknowledges this situation and agrees that this recommendation would help strengthen internal controls. However, due to the cost of implementing this recommendation, the Township Board believes the cost of obtaining the necessary expertise would out-weigh the benefit. Therefore, the Township will continue to request assistance from its financial statement auditors with its year-end account closing procedures.
Finding 2023-002
Finding: 2023-002 Preparation of the U.S. GAAP Basis Financial Statements Criteria: The responsibility of the Township’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles rests with the management of the Township. Management is also responsible for the system of internal accounting controls used to ensure that the financial statements are not materially misstated. Condition: Along with assisting with the year-end closing procedures to the Township’s accounting records, the financial statement auditors also assisted the Township by preparing the annual financial statements (including related notes). Cause: Management does not have the expertise necessary to prepare the financial statements in accordance with U.S. generally accepted accounting principles. Effect: This situation could allow the misstatement of the financial statements. Perspective: Although this finding is considered to be a significant deficiency, we do not perceive it to negatively impact the audit opinions issued. The Township has engaged the financial statement auditors to prepare financial statements in accordance with U.S. generally accepted accounting principles which is a nonattest service. This is a systemic problem that is likely to continue due to the small size of the Township and an overall lack of resources.Recommendation: We recommend that the Township acquire the expertise necessary to prepare the annual financial statements including the required disclosures in accordance with U.S. generally accepted accounting principles. Response: The Township acknowledges this situation and agrees that this recommendation would help strengthen internal controls. However, due to the cost of implementing this recommendation, the Township Board believes the cost of obtaining the necessary expertise would out-weigh the benefit. Therefore, the Township will continue to request assistance from its financial statement auditors with the preparation of its annual financial statements.
Finding 2024-001
Finding: 2024-001 Budget Amendments Criteria: The Michigan Public Act 621 of 1978 requires governmental units to adopt budgets for all applicable governmental type funds before the beginning of the fiscal year and all budget amendments approved prior to the end of the respective fiscal year. Condition: The Township adopted budget amendments for fiscal year 2024 after the year ended March 31, 2024. Cause: Management did not have all budget amendments related to fiscal year 2024 approved until after March 31, 2024. Effect: This situation results in noncompliance of the Michigan Public Act 621 of 1978. Perspective: While we consider this finding to be an instance of noncompliance with State of Michigan budget requirements, we do not perceive it to negatively impact the audit opinions issued. This appears to be an isolated instance as it has not been reported in prior audits. Recommendation: We recommend the Township approve all budget amendments for their governmental funds prior to the end of the fiscal year. Response: The Township acknowledges the situation and will work to avoid any future issues by amending the budget before the end of each fiscal year.