Finding 34880 (2022-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2022-12-15

AI Summary

  • Core Issue: Certain prepaid expenditures were not identified or recorded at year-end, leading to potential misstatements in financial statements.
  • Impacted Requirements: The failure to track and record necessary adjusting journal entries violates GAAP, affecting multiple federal awards totaling over $1.4 million.
  • Recommended Follow-Up: Ensure federal award and accounting personnel properly identify and account for all prepaid expenditures, and review supporting documentation before audits.

Finding Text

2022-001 - CERTAIN PREPAID EXPENDITURES ARE NOT IDENTIFIED AND RECORDED AT YEAR END CRITERIA - THE CONTROL DEFICIENCY EXISTS AS DISTRICT PERSONNEL DID NOT IDENTIFY ALL NECESSARY ADJUSTING JOURNAL ENTRIES RELATED TO PREPAID EXPENDITURES WHICH WERE SIGNIFICANT TO THE DISTRICT'S FINANCIAL STATEMENTS PREPARED IN ACCCORDANCE WITH GAAP. CONDITION - DISTRICT PERSONNEL, IN THE COURSE OF THEIR ASSIGNED DUTIES, DID NOT PROPERLY TRACK AND RECORD CERTAIN MATERIAL ADJUSTING ENTRIES AT YEAR END. THIS DEFICIENCY IN CONTROLS DOES NOT ALLOW MANAGEMENT TO DETECT AND CORRECT A MATERIAL MISSTATEMENT, IF PRESENT. THE DISTRICT'S FEDERAL AWARD AND ACCOUNTING PERSONNEL FAILED TO PROPERLY IDENTIFY AND ACCOUNT FOR PREPAID EXPENDITURES AND THE RELATED DEFERRED REVENUE ON MULTIPLE FEDERAL AWARDS, SPECIFICALLY $82,787 ON TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES FALN 84.010A, $17,660 ON SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS FALN 84.367A, $1,195,613 ON COVID-19 EDUCATION STABILIZATION FUND FALN 84.425, $44,939 ON SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE FALN 93.243 AND $117,400 ON NONMAJOR FEDERAL AWARDS. THE BOOKS REQUIRED ADJUSTMENTS TO REVENUE TOTALING $1,458,399 TO CORRECT THE ACCOUNT BALANCES. CAUSE - IN OUR JUDGMENT, THE DISTRICT'S PERSONNEL, AND THOSE CHARGED WITH GOVERNANCE, IN THE COURSE OF THEIR ASSIGNED DUTIES, FAILED TO PROPERLY IDENTIFY AND ACCOUNT FOR PREPAID EXPENDITURES AND DEFERRED REVENUE, WHICH A THOROUGH REVIEW PROCESS WOULD HAVE DISCOVERED. EFFECT - A POSSIBILITY EXISTS THAT A MATERIAL MISSTATEMENT MAY BE PRESENT AND NOT CORRECTED DUE TO THE DISTRICT PERSONNEL NOT PROPERLY ADJUSTING THESE ACCOUNTS AT YEAR END. CONTEXT - DURING THE COURSE OF THE AUDIT, THE AUDITOR RECOMMENDED MATERIAL ADJUSTMENTS TO CORRECLTY STATE MULTIPLE ACCOUNT BALANCES. RECOMMENDATION - WE RECOMMEND THAT CARE BE TAKEN BY THE FEDERAL AWARD AND ACCOUNTING PERSONNEL TO ENSURE THAT ALL PREPAID EXPENDITURE INFORMATION OF THE DISTRICT IS PROPERLY IDENTIFIED AND ACCOUNTED FOR AT YEAR END, AND THAT SUPPORTING DOCUMENTATION BE REVIEWED AND AGREED TO THE ADJUSTING ENTRIES BEFORE PRESENTING THE INFORMATION FOR AUDIT. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS - SEE EXHIBIT 1.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 34873 2022-001
    Significant Deficiency
  • 34874 2022-001
    Significant Deficiency
  • 34875 2022-001
    Significant Deficiency
  • 34876 2022-001
    Significant Deficiency
  • 34877 2022-001
    Significant Deficiency
  • 34878 2022-001
    Significant Deficiency
  • 34879 2022-001
    Significant Deficiency
  • 34881 2022-001
    Significant Deficiency
  • 34882 2022-001
    Significant Deficiency
  • 34883 2022-001
    Significant Deficiency
  • 34884 2022-001
    Significant Deficiency
  • 34885 2022-001
    Significant Deficiency
  • 34886 2022-001
    Significant Deficiency
  • 34887 2022-001
    Significant Deficiency
  • 34888 2022-001
    Significant Deficiency
  • 34889 2022-001
    Significant Deficiency
  • 34890 2022-001
    Significant Deficiency
  • 34891 2022-001
    Significant Deficiency
  • 34892 2022-001
    Significant Deficiency
  • 34893 2022-001
    Significant Deficiency
  • 611315 2022-001
    Significant Deficiency
  • 611316 2022-001
    Significant Deficiency
  • 611317 2022-001
    Significant Deficiency
  • 611318 2022-001
    Significant Deficiency
  • 611319 2022-001
    Significant Deficiency
  • 611320 2022-001
    Significant Deficiency
  • 611321 2022-001
    Significant Deficiency
  • 611322 2022-001
    Significant Deficiency
  • 611323 2022-001
    Significant Deficiency
  • 611324 2022-001
    Significant Deficiency
  • 611325 2022-001
    Significant Deficiency
  • 611326 2022-001
    Significant Deficiency
  • 611327 2022-001
    Significant Deficiency
  • 611328 2022-001
    Significant Deficiency
  • 611329 2022-001
    Significant Deficiency
  • 611330 2022-001
    Significant Deficiency
  • 611331 2022-001
    Significant Deficiency
  • 611332 2022-001
    Significant Deficiency
  • 611333 2022-001
    Significant Deficiency
  • 611334 2022-001
    Significant Deficiency
  • 611335 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.553 School Breakfast Program $1.30M
84.425 Education Stabilization Fund $471,548
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $450,120
10.559 Summer Food Service Program for Children $371,881
84.424 Student Support and Academic Enrichment Program $367,467
10.555 National School Lunch Program $297,920
10.582 Fresh Fruit and Vegetable Program $276,946
84.367 Improving Teacher Quality State Grants $219,532
84.048 Career and Technical Education -- Basic Grants to States $185,613
21.019 Coronavirus Relief Fund $89,000
84.041 Impact Aid $49,293
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $45,267
84.365 English Language Acquisition State Grants $27,072
15.227 Distribution of Receipts to State and Local Governments $25,343
84.010 Title I Grants to Local Educational Agencies $15,642
84.173 Special Education_preschool Grants $10,355
10.560 State Administrative Expenses for Child Nutrition $6,062
84.027 Special Education_grants to States $3,292
84.196 Education for Homeless Children and Youth $2,642
93.959 Block Grants for Prevention and Treatment of Substance Abuse $250