Finding 1150520 (2024-002)

Finding #2024-002 - Material Adjustments Condition: Johnson Block and Company, Inc. proposed adjusting journal entries during the audit process. We deem these entries to be material in relation to the financial statements. Since the Village did not make these adjustments in its accounting system prior to the audit, a material weakness exists in the Village’s internal controls. Criteria: Material adjusting journal entries not prepared by the Village before the audit are considered an internal control weakness. Cause: The Village does not have policies and procedures in place to ensure that all transactions are properly recorded on the general ledger prior to the audit. Effect: This means that the proper recording and reporting of financial information may not occur within a timely manner. Recommendation: Policies and procedures should be implemented to ensure account balances are properly recorded in a timely manner. Response: The Village will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditor.