Audit 400715

Condition: As part of our audit, the auditor proposed adjusting entries to ensure that the financial statements were not materially misstated. Criteria: Management of the Village should ensure that controls are properly designed and implemented when closing the books and records and preparing for the year-end audit. This will ensure that the financial statements presented are free of material misstatement. Cause: The current system of internal control is not properly designed to ensure that the financial statements are not materially misstated. Effect of Potential Effect: The effect of this deficiency is that misstatements may not be identified and corrected on a timely basis. Repeat Finding, if applicable: Yes, similar finding was identified during last year. Recommendation: Management of the Village should review its processes and procedures and related controls to ensure that the trial balance is properly closed when provided to the auditors for audit procedures. View of Responsible Officials and Planned Corrective Action: Management feels due to the nature of operations that the current system is cost effective for a project of this size; however, they will consider adjusting accounts where possible in the future.

The details of this finding can be found in Finding 2025-004, included in Section III - Federal Award Findings and Questioned Costs. Please refer to that section for more details.

The details of this finding can be found in Finding 2025-005, included in Section III - Federal Award Findings and Questioned Costs. Please refer to that section for more details.

Criteria: All disbursements from the replacement reserve account were properly authorized by the USDA. Condition: A withdrawal from the replacement reserve account was not approved by the USDA. Cause: Management did not properly implement controls over compliance to ensure that no withdrawals are made from the replacement reserve account prior to approval from USDA. Effect of Potential Effect: The replacement reserve account had a withdrawal without USDA’s approval. Perspective: The Village made only one withdrawal from this account during the year. Questioned costs: $25,000 Repeat Finding, if applicable: Yes, similar finding was identified during last year. Recommendation: We recommend that controls are implemented to ensure the proper approvals are received for all withdrawals from restricted accounts such as the replacement reserve. View of Responsible Officials and Planned Corrective Action: Management agreed with the recommendation and will ensure all proper approvals are received prior to any withdrawals from the replacement reserve.

Criteria: All required deposits for the replacement reserve account were made in compliance with the USDA agreements. Condition: Monthly deposits made to the replacement reserve account were not the correct amount for the year. Cause: Management did not properly implement controls over compliance to ensure that correct monthly deposits were made in the replacement reserve account during the year. Effect of Potential Effect: The replacement reserve account was underfunded as of December 31, 2025. Perspective: For all 12 deposits required, amount deposited was $24,441 instead of the required $27,083, therefore total deposits were lower than required by $2,642. Repeat Finding, if applicable: This is not a repeat finding. Recommendation: We recommend that controls are implemented to ensure the proper deposits are made to the replacement reserve account. View of Responsible Officials Management agreed with the recommendation and will ensure they confirm with the USDA and Planned Corrective representative regarding the required monthly deposit amount at the beginning of the year in Action: future. In addition, management will make a deposit for the underfunded amount of $2,642 during 2026 related to 2025 required deposits.