Audit 391721

Finding 2025 – 001: Restatement to Net Position Condition: During audit fieldwork, our testing resulted in a restatement of net position in order to correct leased capital assets, buildings, land improvements and equipment categories of capital assets that were improperly recorded in prior years. Criteria: A good system of internal controls would provide for accurate recording and reporting of capital assets on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to capital assets were required in order to accurately present the District’s financial statements. Effect: A material adjustment to the District’s beginning net position was required to properly state capital assets. Recommendation: We recommend the District implement effective internal controls in order 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 District and Assistant Superintendent of Business Services will implement internal controls to properly capital assets on a timely basis prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the District’s financial activities and resources. Corrective Action Plan: The Assistant Superintendent of Business Services, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork.