Finding 1096536 (2023-002)

Finding 2023 – 002: Audit Journal Entries Condition: During audit fieldwork, our testing resulted in audit adjustments in order to present materially accurate financial statements. Criteria: A good system of internal controls would provide for accurate representations of adjusted account balances for all Village accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required in order to accurately present the Village’s financial statements. Effect: The Village’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the Village’s financial activities and resources. Corrective Action Plan: The Finance Director, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork.