Finding 1150178 (2024-001)

Finding 2024-001: External Financial Reporting Significant Deficiency Criteria: Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the Authority’s financial statements. Condition: The Authority’s accounting staff does not possess the necessary expertise to ensure that certain financial statement reporting and disclosure requirements of generally accepted accounting principles are appropriately addressed. Adjustments were made to the financial statement amounts and disclosures to properly address these requirements. Cause: The operating budget for an organization the size of the Authority does not allow for hiring someone with this expertise. Effect: The financial statements prepared by management will be incomplete without adequate footnote disclosures. Recommendation: Resolving the deficiency would require the Authority to hire additional accounting staff who possess the necessary expertise required for preparation of external financial statements in accordance with generally accepted accounting principles. This solution may result in a substantial increase in operating costs. The other action would be to accept that by definition there is a significant deficiency in internal control and cost of eliminating that deficiency would exceed its benefit. Views of Responsible Officials and Planned Corrective Action: The Authority has determined that the operating budget cannot handle the additional expense of hiring someone with this expertise, and the cost of eliminating the deficiency would exceed it benefit.. Conclusion Response accepted.