Finding Text
Condition: The District maintains its general ledger on a cash basis. Accrual adjustments are only
made at year end. Reconciliations for receivables and payables are made at year end as well.
Criteria: The District is responsible for preparing annual financial statements in accordance with
generally accepted accounting principles. Timely recording of transaction on an accrual basis is
in accordance with GAAP and provides management with the tools necessary to make informed
financial decisions.
Cause: Routine preparation of reconciliations of all detailed account balances is not being
performed due to the limited capability of the current accounting system; therefore all
transactions are not being recorded.
Effect: The current accounting system is not capable of recording beginning balances for any
balance sheet accounts. This results in the absence of balances in the accounts on the balance
sheet, therefore, financial decisions are being made based on incomplete data.