Finding 1217216 (2025-003)

2025.003 PROPER DOCUMENTATION AND NECESSARY CALCULATIONS FOR NEWLY IMPLEMENTED ACCOUNTING STANDARDS Condition: Criteria: Effect: Cause: The lack of proper documentation and the ability to make timely calculations in the value of lease and subscription assets and liabilities that are required under relatively new accounting standards resulted in the audit being completed and filed in an untimely manner. Documentation such as contracts, invoices, purchase orders etc. should be obtained and maintained by the accounting department so that proper information is available to make proper calculations of the value of assets and liabilities that may be necessary under such documents. In addition, a program should be available to accounting personnel to be able to make such calculations. The audit was significantly late in being issued due to the City not being able to implement a new accounting standard in a timely manner. The late issue date could cause compliance issues with granting agencies, including single audit submissions and the Georgia Department of Audits and Accounts. Documentation and a process/program needed to make the necessary calculations under the new accounting standards for leases and subscriptions were not readily available to the accounting department. Recommendation: Management needs to ensure that proper documentation is required to be maintained by the accounting department for all contracts, agreements etc. In addition, management needs to make available processes/ programs that are necessary to make calculations of values under such contracts and agreements. View of responsible officials and planned corrective action: Management agrees with the finding. Management will emphasize the need for the accounting department to obtain and maintain documentation necessary that will provide information to make the necessary calculations for values of assets and liabilities associated with lease and subscription agreements. Management will also ensure that a process / program is in place that is required to make such calculations.