Audit 389998

Condition: During audit fieldwork, our testing resulted in a restatement of fund balance to implement a new capital asset policy, implement GASB 87, and write-off of Forgivable Loan balances. Criteria: A good system of internal controls would provide accurate recording and reporting of the above listed items on a regular basis to provide for accurate financial reporting. Cause: Year-end entries related to capital asset balances, GASB 87 implementation, and Forgivable Loan balance write-off were required to accurately present the City’s financial statements. Effect: A material adjustment to the City’s beginning fund balance was required to properly state capital assets, GASB 87 balances, and Forgivable Loan balances. Recommendation: We recommend the City implement effective internal controls to provide an accurate assessment of reporting requirements. This implementation of improved controls would result in the appropriate recognition for financial reporting requirements. Corrective Action Plan: The City and finance director will implement internal controls to properly record capital assets, GASB 87 balances, and Forgivable Loan balances in a timely basis prior to audit fieldwork

Condition: Previously and during audit fieldwork, our testing resulted in audit adjustments to present materially accurate financial statements. Criteria: A good system of internal controls would provide accurate representations of adjusted account balances for all City accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required to accurately present the City’s financial statements. Effect: The City’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the City’s financial activities and resources. Corrective Action Plan: The City and finance director will implement internal controls to properly record year-end adjustments on a timely basis prior to audit fieldwork.