Finding Text
Financial Reporting Condition: Management provides the information needed to prepare the financial statements. Regardless, the auditors prepare a complete set of financial statements including required disclosures, with management's oversight and approval. Criteria: Management is responsible for establishing and maintaining adequate internal control over financial reporting. A system of internal control over financial reporting does not stop at the general ledger; rather it includes controls over the preparation of the financial statements and related footnote disclosures. Additionally, having sufficient expertise in selecting and applying accounting principles that are in conformity with generally accepted accounting principles is an aspect of such controls. Cause: During our review of the financial reporting process, we noted that, while the District prepares internal financial reports, the expertise to prepare a complete set of financial statements, including converting fund financial statements to the government-wide presentation and disclosures in conformity with generally accepted accounting principles is deficient. Effect: Without adequate financial reporting expertise, errors and omissions could occur in the financial statements and not be detected by management. Recommendation: We recommend that management assess the financial reporting process and consider implementing additional internal control procedures to ensure the accuracy and completeness of the financial statements. Repeat Finding: This finding is a repeat of a finding reported at April 30, 2024.