Audit 406926

Material Weakness Finding 2024 – 001: Restatement to Fund Balance Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to implement GASB 96 and correct buildings, land improvements and equipment categories of capital assets that were improperly recorded in the prior year. Criteria: A good system of internal controls would provide for accurate recording and reporting of leases and capital assets on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to leases and capital assets were required in order to accurately present the City’s financial statements. Effect: A material adjustment to the City’s beginning fund balance was required to properly state leases and capital assets. Recommendation: We recommend the City 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 City will implement internal controls to properly record leases and capital assets on a timely basis prior to audit fieldwork