Audit 51578

Financial Reporting Criteria ? A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements of the financial statements on a timely basis. Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the District?s financial statements. Condition ? Material amounts of revenues and expenditures were improperly omitted from the District?s financial statements because the grant was paid directly to the vendor by the federal awarding agency. Adjustments were subsequently made by the District to properly include all amounts in the financial statements. Cause ? District policies do not require and procedures have not been established to require independent review of year end grant reconciliations. Effect ? Lack of policies and procedures resulted in District employees not detecting the errors in the normal course of performing their assigned functions. As a result, material adjustments to the District?s financial statements were necessary. Recommendation ? The District should implement procedures to ensure all grant revenues and expenditures are properly accounted for through the District?s financial reporting system and establish a review process to help ensure the accuracy of the amounts reported. Response ? We will implement procedures to double check these in the future to avoid missing and reconciling any grant revenues and expenditures in the future. Conclusion ? Response accepted.

Financial Reporting Criteria ? A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements of the financial statements on a timely basis. Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the District?s financial statements. Condition ? Material amounts of revenues and expenditures were improperly omitted from the District?s financial statements because the grant was paid directly to the vendor by the federal awarding agency. Adjustments were subsequently made by the District to properly include all amounts in the financial statements. Cause ? District policies do not require and procedures have not been established to require independent review of year end grant reconciliations. Effect ? Lack of policies and procedures resulted in District employees not detecting the errors in the normal course of performing their assigned functions. As a result, material adjustments to the District?s financial statements were necessary. Recommendation ? The District should implement procedures to ensure all grant revenues and expenditures are properly accounted for through the District?s financial reporting system and establish a review process to help ensure the accuracy of the amounts reported. Response ? We will implement procedures to double check these in the future to avoid missing and reconciling any grant revenues and expenditures in the future. Conclusion ? Response accepted.