Audit 409168

2025-01 Material Weakness in Internal Control over financial Reporting – Material Adjusting journal entries Criteria: Under professional standards, a material weakness exists when material misstatements are not identified through an entity’s system of controls. Condition: During the audit, there were several material adjusting journal entries proposed to management to issue an unmodified opinion. Cause: Procedures are in place for the review of the ledger on a regular basis and for monthly and annual reporting but due to staffing and a software change, there were material adjustments proposed to management to issue an unmodified opinion. Effect: There is more than a remote chance that material misstatements could occur without detection. Context: The Village had an unusual year due to participation in the Advanced Metering Infrastructure Project, a software conversion, and a key finance team member working limited hours due to medical issues for the last three months of year. And has since resigned. These circumstances, and the timing in relation to audit, did not allow sufficient time for existing Village staff to prepare the necessary reconciliations due to the timing of the audit. Recommendation: Management should consider hiring a replacement for the Finance Manager with the necessary skills and knowledge to prepare the monthly reconciliations and financial statements as expeditiously as possible. Views of Responsible Officials and Planned Corrective Actions: The Village feels that even though this is a repeat finding the cause is different from the prior year, and was an isolated occurrence, some medical events cannot be planned for. Management will hire a qualified replacement as soon as possible. To the Board of Trustees Report 4 (cont’d) Village of Enosburg Falls, Inc. Page 3 Context: The Village had an unusual year due to participation in the Advanced Metering Infrastructure Project, a software conversion, and a key finance team member working limited hours due to medical issues for the last three months of year. And has since resigned. These circumstances, and the timing in relation to audit, did not allow sufficient time for existing Village staff to prepare the necessary reconciliations due to the timing of the audit. Recommendation: Management should consider hiring a replacement for the Finance Manager with the necessary skills and knowledge to prepare the monthly reconciliations and financial statements as expeditiously as possible. Views of Responsible Officials and Planned Corrective Actions: The Village feels that even though this is a repeat finding the cause is different from the prior year. And was an isolated occurrence, some medical events cannot be planned for. Management will hire a qualified replacement as soon as possible.