Audit 386417

2025-001 FINANCIAL REPORTING Prior Year Finding Number 2024-001 Criteria A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements of the financial statement of a timely basis. Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the Organization's financial statements. Condition Significant year-end adjusting entries were not properly recorded in the Organization's financial statements primarily related to the receivables and payables for the Water Trails Project. Adjustments were subsequently made by the Organization to properly include these amounts in the financial statements. Cause Reporting financial data reliably in accordance with generally accepted accounting principles requires management to possess sufficient knowledge and training to select and apply accounting principles and prepare financial statements including footnote disclosures. Management presently lacks the proper procedures to identify year-end accruals for receivables and payables. Effect Lack of proper procedures for preparing financial statements resulted in Organization employees not detecting the errors in the normal course of performing their assigned functions. As a result, material adjustments to the Organization's financial statements were necessary. Recommendation Management should continue to work on year-end closing procedures to properly identify receivables and payables at June 30. The Organization should continue to utilize accounting staff to assist with the financial accounting system entries and bank reconciliations. Response Management acknowledges the finding related to year-end receivables and payables. The adjustment noted is related to a limited number of invoices received after fiscal year-end for services performed prior to June 30. Management will continue to refine year-end closing procedures and coordinate with its accounting consultant and independent auditors to ensure receivables and payables are identified and recorded in the appropriate fiscal period. Conclusion Response accepted.

INTERNAL CONTROL DEFICIENCIES 2025-002 FINANCIAL REPORTING Prior Year Finding Number 2024-002 Assistance Listing Number 20.933 – National Infrastructure Investments See page 43, Finding 2025-001 for details regarding this finding. INSTANCES OF NONCOMPLIANCE No matters were noted.