Finding 1181699 (2025-002)

Finding 2025-002: Material Journal Entries Condition: During our current year-end audit fieldwork, our testing resulted in material journal entries to be posted to properly state the City’s financial statements. Criteria: A good system of internal controls would ensure accurate recording of necessary journal entries on a regular basis to provide for accurate financial reporting. Cause: Year-end accrual entries along with correcting entries to properly reclassify necessary revenues and expenses into the proper ledger accounts were required to accurately present the City’s financial statements. Effect: Material adjustments to the City’s ledger accounts were required to properly state the City’s financial statements as of fiscal year ended April 30, 2024. Recommendation: We recommend that the City implement effective internal controls in order to provide an accurate assessment of reporting requirements for year-end accruals and deferrals and necessary reclassification adjustments for proper classification in the City’s financial statements. Corrective Action Plan: The City Comptroller, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork