Finding Text
Criteria:
The District is required to have internal controls in place that enable it to prepare complete financial
statements, including the schedule of expenditure of federal awards in accordance with generally
accepted accounting standards and in accordance with the Uniform Guidance at 2 CFR 200.510(b).
Condition:
The District did not record federal grant income or expenses for the Water and Waste Disposal Systems
for Rural Communities program.
Cause:
The District failed to have internal controls to properly record all federal grant activity and identify federal
funds.
Effect:
The District did not record federal grant income or expenditures for the Water and Waste Disposal
Systems for Rural Communities. The exclusion resulted in a material misstatement of contributed capital
and construction in process. In addition, management engaged the auditor to prepare the schedule of
expenditure of federal awards. Management reviewed, approved and accepted responsibility for the
schedule of expenditure of federal awards prior to its issuance.
Recommendation:
We recommend that management review their procedures for identifying federal funds and review the
costs and benefits involved to retain a consultant with the required expertise to prepare the schedule of
expenditure of federal awards.
Response:
Management agrees with the finding and will review internal control procedures related to the recording of
federal grant activity and cost to retain a consultant with the required expertise to prepare the schedule of
expenditure of federal awards.