Finding 1076893 (2021-003)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2021
Accepted
2024-09-30

AI Summary

  • Issue: The District did not properly record accumulated depreciation and fixed assets from Construction in Progress.
  • Impact: This led to an overstatement of the District’s net capital assets and net income, misrepresenting their financial position.
  • Follow-up: The Board and bookkeeper should review and reconcile completion dates of fixed assets at year-end to ensure accuracy.

Finding Text

Condition: The District failed to correctly record accumulated depreciation and fixed assets in Construction in Progress as they were completed. Criteria: As fixed asset additions in construction in progress are completed and put in use, the fixed asset additions are to be classified according to the type of addition they are. Effect: The District’s net capital assets and net income are overstated and do not accurately reflect their financial position. Cause: Management failed to correctly record and classify assets from Construction in Progress as they were completed. Recommendation: We recommend at year-end, the Board and bookkeeper review and reconcile the completion dates of fixed assets in construction in progress to financial information pertaining to construction in progress to ensure clerical accuracy. Auditee Response: At each year-end the Board will schedule a review with the bookkeeper to reconcile completion dates of fixed assets in construction in progress to financial information pertaining to construction in progress to ensure clerical accuracy.

Categories

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Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
12.121 Montana, Nevada, New Mexico, Utah, Idaho, & Wyoming Environmental Infrastructure (section 595) - Arra $1.51M
66.468 Capitalization Grants for Drinking Water State Revolving Funds $1.04M
14.218 Community Development Block Grants/entitlement Grants $450,000