2024 – 1 Year End Audit Entries and Financial Reporting - The audit resulted in over 30 adjusting
journal entries proposed to management. Some of these entries were material to the financial
statements as a whole and required in order to issue an unmodified opinion. The Town does not
have the experience and training needed to –
- Prepare all of its year end reconciliations and journal entries and prepare financial
statements, complete with notes, in accordance with accounting principles generally
accepted in the United States of America. Accordingly, the Town is unable to, and has
not established internal controls over the preparation of year-end reconciliations and
journal entries and the preparation of the financial statements.
- Select and apply accounting principles that are in conformity with accounting principles
generally accepted in the United States of America. Accordingly, the Town is unable to,
and has not established, internal controls over the selection and application of accounting
principles.
Criteria - Under SAS 115, an internal control deficiency exists when management does not possess
the financial expertise to prepare end reconciliations and prepare financial statements in accordance
with generally accepted accounting principles.
Cause: Unknown
Effect: Because management lacks expertise in financial accounting and reporting, there is more
than a remote likelihood that a misstatement of the entity’s financial statements that is more than
inconsequential will not be prevented or detected under the provisions of SAS 115.
Recommendation: To correct these deficiencies, management would need to hire personnel with
adequate accounting experience to perform these functions. The Town would need to weigh the
costs of these corrections verse the benefit.
Management Response: The Town hired a new director of finance with a strong educational
background.
2024 – 2 Depreciation Schedules - During the course of our audit it was noted that the depreciation
schedules were not completed, this led to a delay in the completion of the audit.
Criteria: Management should review all assets to ensure that depreciation expenses is calculating
properly and that live assets are applied consistently based on capitalization policy. The depreciation
schedule for should be updated quarterly at the very least to ensure that they are ready for the audit.
Cause: Unknown
Effect: Funds are not adequately representing a true reflection of the depreciating assets throughout
the year
Recommendation: A standard monthly entry would provide the financial statements with an
adequate representation of the depreciation expense per month.
Management Response: Management is going to keep up to date with its depreciation schedule and
monthly entry.
2024 – 3 Loan Reimbursement Requests - During the course of our audit it was noted that loan
reimbursement request is not being conducted timely.
Criteria: Loan reimbursements should be requested in a timely manner or else the taxpayers are
being responsible to cover the bills. This also makes calculating expenditures related to possible
single audits to be reconciled.
Cause: Unknown
Effect: Taxpayers are being responsible to cover the bills of projects that they previous approved to
be paid by debt.
Recommendation: Request reimbursement of loans throughout the project.
Management Response: Management is making more of an effort to request reimbursement
throughout a project rather than completion.
2024 – 4 Reconciliations - During the course of our audit it was noted that cash, investments and
accounts payable and account receivable are not being reconciled monthly.
Criteria: Management should reconcile all accounts receivable, investments and accounts payable
accounts monthly to prevent errors from compounding.
Cause: Unknown
Effect: Unrecorded activity was noted throughout the year.
Recommendation: All cash, investments and accounts payable and receivable should be reconciled
monthly
Management Response: Management will reconcile all cash, investments and accounts payable
accounts monthly.
2024 – 1 Year End Audit Entries and Financial Reporting - The audit resulted in over 30 adjusting
journal entries proposed to management. Some of these entries were material to the financial
statements as a whole and required in order to issue an unmodified opinion. The Town does not
have the experience and training needed to –
- Prepare all of its year end reconciliations and journal entries and prepare financial
statements, complete with notes, in accordance with accounting principles generally
accepted in the United States of America. Accordingly, the Town is unable to, and has
not established internal controls over the preparation of year-end reconciliations and
journal entries and the preparation of the financial statements.
- Select and apply accounting principles that are in conformity with accounting principles
generally accepted in the United States of America. Accordingly, the Town is unable to,
and has not established, internal controls over the selection and application of accounting
principles.
Criteria - Under SAS 115, an internal control deficiency exists when management does not possess
the financial expertise to prepare end reconciliations and prepare financial statements in accordance
with generally accepted accounting principles.
Cause: Unknown
Effect: Because management lacks expertise in financial accounting and reporting, there is more
than a remote likelihood that a misstatement of the entity’s financial statements that is more than
inconsequential will not be prevented or detected under the provisions of SAS 115.
Recommendation: To correct these deficiencies, management would need to hire personnel with
adequate accounting experience to perform these functions. The Town would need to weigh the
costs of these corrections verse the benefit.
Management Response: The Town hired a new director of finance with a strong educational
background.
2024 – 2 Depreciation Schedules - During the course of our audit it was noted that the depreciation
schedules were not completed, this led to a delay in the completion of the audit.
Criteria: Management should review all assets to ensure that depreciation expenses is calculating
properly and that live assets are applied consistently based on capitalization policy. The depreciation
schedule for should be updated quarterly at the very least to ensure that they are ready for the audit.
Cause: Unknown
Effect: Funds are not adequately representing a true reflection of the depreciating assets throughout
the year
Recommendation: A standard monthly entry would provide the financial statements with an
adequate representation of the depreciation expense per month.
Management Response: Management is going to keep up to date with its depreciation schedule and
monthly entry.
2024 – 3 Loan Reimbursement Requests - During the course of our audit it was noted that loan
reimbursement request is not being conducted timely.
Criteria: Loan reimbursements should be requested in a timely manner or else the taxpayers are
being responsible to cover the bills. This also makes calculating expenditures related to possible
single audits to be reconciled.
Cause: Unknown
Effect: Taxpayers are being responsible to cover the bills of projects that they previous approved to
be paid by debt.
Recommendation: Request reimbursement of loans throughout the project.
Management Response: Management is making more of an effort to request reimbursement
throughout a project rather than completion.
2024 – 4 Reconciliations - During the course of our audit it was noted that cash, investments and
accounts payable and account receivable are not being reconciled monthly.
Criteria: Management should reconcile all accounts receivable, investments and accounts payable
accounts monthly to prevent errors from compounding.
Cause: Unknown
Effect: Unrecorded activity was noted throughout the year.
Recommendation: All cash, investments and accounts payable and receivable should be reconciled
monthly
Management Response: Management will reconcile all cash, investments and accounts payable
accounts monthly.