Finding Text
Material Weakness: 2024-001 Monitoring of financial reporting: Criteria: The District should have a system of internal controls surrounding financial reporting which provides for the administration, monitoring and reporting of financial activity of the District on a routine, timely basis. This allows for the District to maintain activity within the financial management system that allows for meaningful, useful and timely financial reporting (internal and external). Condition: While the District has procedures which generally provide for the processing of daily cash receipts and payroll and vendor expenditures through established warrant processing procedures, the procedures for the overall monitoring of the District’s financial activity (inclusive of grants) were not adequate to allow the District to close-out fiscal year 2023 in a timely manner. The deficiencies in overall financial reporting monitoring (inclusive of grants) continued through fiscal year 2024. Current personnel have begun to address these deficiencies as fiscal year 2024 has been closed out and are in the process of implementing enhancements going forward. Potential Effect: Lack of timely financial reporting and monitoring thereof present the reasonable possibility that material misstatements will not be prevented, or detected and corrected, on a timely basis. Cause: The District experienced turnover in key finance and accounting positions, prior to the end of fiscal year 2023 (April 2023) and during the fiscal year 2024. An interim, part-time individual was hired; however, the close-out and reporting issues associated fiscal year 2023 perpetuated the overall financial reporting and monitoring deficiencies through fiscal year 2024. The District hired a new full-time new Director of Finance and Operations officially took the position effective July 1, 2023. Auditor’s recommendation: As recommended in the prior year, in the auditor’s professional opinion, it is important that management and those charged with governance design and implement a system of internal controls surrounding financial reporting which ensures the timely close-out, reconciliation, communication and reporting of all financial activity (inclusive of grants). The design and implementation of internal control policies and procedures should also consider continuity of effective financial reporting and monitoring during periods of staffing turnovers. continuity of operations in the event of staffing turnovers. Per our discussions with management additional procedures are being implemented during fiscal year 2025.