Finding Text
2025 – 001: Material Prior Period Restatements – Correction of Errors Type of Finding: Material Weakness Criteria: Accounting Standards require that prior‑period financial statements be free from material misstatement and that errors be corrected through the restatement of beginning net assets when identified. Additionally, Government Auditing Standards (GAGAS) require auditors to report material weaknesses in internal control when deficiencies create a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected in a timely manner. Condition: During our audit of the financial statements for the fiscal year ended July 31, 2025, material errors in previously issued financial statements were identified that required restatement. The restatements affected beginning net assets and corrected misstatements related to grants receivable, grant revenue, net asset without donor restrictions and net assets without donor restrictions. The cumulative effect of these corrections was material to the financial statements. Effect: As a result of the errors, previously issued financial statements were materially misstated. The University was required to restate beginning net assets by $8,267,823 and adjust multiple financial statement line items for the affected funds and activities. Cause: Inadequate controls over financial reporting resulted in material misstatements that required restatement of prior‑year financial statements. Recommendation: We recommend that management strengthen internal controls over financial reporting. Views of Responsible Officials: There is no disagreement with the audit finding.