Finding 1171709 (2025-001)

Preparation of Financial Statements Significant Deficiency in Internal Control over Financial Reporting Criteria: Proper controls over financial reporting include a system designed to provide for the preparation of the accompanying financial statements and notes to the financial statements that are materially correct and include all required disclosures in accordance with accounting principles generally accepted in the United States. Condition: The Project does not have an internal control system designed to provide for the preparation of the full financial statements being audited. We were requested to draft the financial statements and accompanying notes to the financial statements. Cause: The Project has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that the Project would not be able to draft the financial statements and the accompanying notes to the financial statements without the assistance of the auditors. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Management and those charged with governance should make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Views of Responsible Officials: Management agrees with the finding.