Finding Text
2022-001 The Fire District should have internal controls in place that enable it to prepare complete financial statements (recurring). Criteria: The Fire District should have internal controls in place that enable it to prepare complete financial statements, including note disclosures, in compliance with generally accepted accounting principles. Condition: Management was unable to prepare draft financial statements, including the related notes to the financial statements. Cause: The Fire District lacks personnel with the expertise to apply generally accepted accounting principles in preparing its financial statements including note disclosures and thus, does not have the internal control procedures required to draft the financial statements in conformity with generally accepted accounting principles. Effect: Management engaged the auditor to prepare draft financial statements, including the related notes to the financial statements. Management reviewed, approved, and accepted responsibility for the financial statements prior to their issuance. Recommendation: We recommend management review the costs and benefits involved to retain a consultant with the required expertise to prepare the financial statements or review the financial statements as prepared by the auditor for compliance with generally accepted accounting principles. Response: The Fire District does not believe that hiring a professional consultant to aid in financial reporting would be cost effective or economically feasible at this time.