Finding #2025-002 -Material Audit Adjustments (Prior Year Finding #2024-002) Condition: The audit proposed adjusting journal entries during the audit process to adjust District account balances. We deem these entries to be significant in relation to the financial statements. Since the District did not make these adjustments in its accounting system prior to the audit, a material weakness was determined to exist in the District's internal controls. Effect: Financial reports generated by the accounting system may not provide an accurate reflection of the District's financial position or activities. Cause: Financial information was not recorded in a timely manner and numerous adjustments were needed in order to correct account balances. Criteria: Material adjusting journal entries not prepared by the District before the audit are considered an internal control weakness. Recommendation: Policies and procedures should be implemented to ensure account balances are properly recorded in a timely manner. Response: The District will establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditor in future years. Contact Person: Loras Winders Anticipated Completion: June 30, 2026