FAC Explorer

Finding 1164859 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2025-12-15
Audit: 374715
Organization: City of Parchment (MI)
Auditor: SIEGFRIED CRANDALL PC

AI Summary

  • Core Issue: There was a material audit adjustment due to non-compliance with GAAP in financial statement preparation.
  • Impacted Requirements: All governmental units in Michigan must ensure proper internal controls for accurate accounting records and external financial reporting.
  • Recommended Follow-Up: Management should enhance internal controls to align with GAAP requirements and prevent future adjustments.

Finding Text

Material audit adjustment. Criteria: All governmental units in Michigan are required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). This is the responsibility of management. The preparation of financial statements in accordance with GAAP requires internal controls over both (1) recording, processing, and summarizing accounting data (i.e., maintaining internal accounting records), and (2) reporting government-wide and fund financial statements, including the related notes to the financial statements (i.e., external financial reporting).

Corrective Action Plan

Management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1164858 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.760 Water and Wastewater Disposal Systmes for Rural Communities $1.05M
66.818 ASSESSMENT /CLEAN UP/MULTIPURPOSE FOR EWDJT $161,392
21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds $31,891