Audit 409359

Condition Audit adjustments that were material to the financial statements were required in order for the Condition Audit adjustments that were material to the financial statements were required in order for the financial statements to be fairly presented in accordance with accounting principles generally accepted in the United States of America. Criteria An indicator of a material weakness is when the auditor identifies a material misstatement in the financial statements that was not detected by the entity's internal control. Cause The complex and infrequent nature of certain investment transactions resulted in the failure to properly record all 2025 investment activity, including additional investment in annuities, as well as the changing value of annuity contracts. Misstatements also occurred due to unrecorded interfund activity between the General Fund and the Dirt, Gravel, and Low Volume Road Fund; unrecorded liability for unearned grant revenue; and grant receivables, and accounts payable. -Effe-ct The effect of the misstatements, had they not been corrected through audit adjustments, would have been a material misstatement of the financial statements. Recommendation We recommend that management adjust the general ledger for the proposed audit adjustments effective December 31, 2025. We also recommend that management actively monitor investments throughout the year, including requesting monthly or quarterly statements on life insurance contracts to ensure timely and accurate recording of investment transactions and balances. As complex or infrequent transactions arise, accounting personnel should seek guidance on proper accounting treatment. In addition, deferred revenue, grants receivables, and accounts payable should be reviewed and adjusted at year-end. Management's Response Management will address the proposed audit adjustments effective December 31, 2024. Accounting personnel will obtain guidance from the auditor on the proper reporting of infrequent and unusual transactions as they arise. Further, management will request statements on life insurance contracts in order to properly monitor and record activity and investment balances.

Condition The District does not track federal funds received and/or spent versus state and local funds. Criteria It is generally accepted accounting practice to track federal funds spent to determine if a single audit is required. Cause Unknown Effect The risk of not tracking federal funds received and spent could result in a misstatement of the single audit or incorrectly not filing a single audit. Recommendation We recommend that procedures be implemented to track the federal funds that are received and subsequently spent each fiscal year. Management's Response Management will review the provided State Conservation Commission and Department of Environmental Protection grant awards with the percentage breakdown of Federal and State money grant sources from the contract allocations and spending balance of the federal monies verses state monies within the grant allocation. -