FAC Explorer

Finding 1206429 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-04-10
Audit: 398446
Organization: City of Kiester, Minnesota (MN)
Auditor: CARLSONSV LLP

AI Summary

  • Core Issue: The City approved corrections for misstatements, indicating a lack of effective controls to prevent material misstatements in financial statements.
  • Impacted Requirements: The City must have controls in place to ensure the accuracy and completeness of financial records, as required by GAAP.
  • Recommended Follow-Up: The City should assess and enhance its internal control processes to ensure timely adjustments of accounts to their correct year-end balances.

Finding Text

Finding 2025-001. Material Audit Adjustments Condition: The audit firm proposed, and the City approved corrections of certain misstatements. Criteria The City should have controls in place to prevent and detect a material misstatement in the financial statements in a timely manner. Management is responsible for the accuracy and completeness of all financial records and related information. Their responsibility includes adjusting the financial statements to correct material misstatements. Cause: The City has not established controls to ensure that all accounts are adjusted to their appropriate year-end balances in accordance with GAAP.Effect: The design of internal control over completeness and accuracy of financial records could adversely affect the City’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Recommendation: The City should continue to evaluate its internal controls processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year end balances in accordance with GAAP.

Corrective Action Plan

Corrective Action Plan (CAP) Disagreement with Audit Finding: None Actions Planned in Response to Finding: The City will continue to review and approve adjusting journal entries as proposed by the auditor, as well as taking responsibility for the audited financial statements. Official Responsible for Ensuring CAP: Doris Troll, City Clerk/Treasurer Planned Completion Date for CAP: December 31, 2026 Plan to Monitor Completion of CAP: City Council

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1206426 2025-001
    Material Weakness Repeat
  • 1206427 2025-002
    Material Weakness Repeat
  • 1206428 2025-003
    Material Weakness Repeat
  • 1206430 2025-002
    Material Weakness Repeat
  • 1206431 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.760 Water and Waste Disposal Systems for Rural Communities $4.19M
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $600,000