Audit 408093

Finding 2025-004 Information on the Federal Program: Child Nutrition Cluster, Assistance Listing Number 10.553/10.555, FAIN 251NJ304N108, Grant Period 7/1/24-6/30/25. Criteria or specific requirements: Governmental Accounting Standards Board (GASB) Statement No. 34 requires school districts and other public entities to accurately track and account for capital assets. The District did not provide an updated fixed asset report. Condition: The District did not provide an updated capital asset report including additions, deletions and depreciation expense, which is to be reported as a direct expense. Context: The District has not updated the financial statements for depreciation expense and has not implemented a system to record assets in accordance with state requirements. Effect: The effects on the financial statements, although not reasonably determinable, are presumed to be material. Cause: The District did not provide an updated capital asset report including additions, deletions and depreciation expense, which is to be reported as a direct expense. Recommendation: The District’s capital asset accounting and reporting system be updated to reflect additions, deletions and depreciation expense on an annual basis. Management’s Response: The District has reviewed this finding and has indicated corrective action will be taken.