Finding 370781 (2022-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2024-02-27

Audit: 292422

Organization: Santa Maria Public Airport District (CA)

Auditor: C J Brown & Company CPAS

AI Summary

Answer: Grant revenue was not recognized correctly in the prior period, leading to necessary adjustments in 2021.
Trend: There is a need for better tracking of grant expenditures to ensure accurate revenue recognition.
List: Implement a process for tracking grant expenditures and receipts to avoid future misstatements in capital assets and accounts payable.

Finding Text

During our audit, we noted that grant revenue in the prior period was not properly recognized as contribution revenue when the District’s grant expenditures were incurred. This is due to the lack of a process to track grant expenditures to grant receipts with proper cutoff. As a result, prior period adjustments were recorded to properly recognize the grant award in the 2021 reporting periods. In addition, our analysis revealed that the District’s capital assets and accounts payable balances were understated in 2021 as a result.

Corrective Action Plan

The District’s Manager of Finance and Administration will update its standard operating procedures to accurately record and report all transactions. Thereafter, management and the manager of finance and administration plan to review all account balances for certain relationships, proper cut-off, and accuracy.

Other Findings in this Audit

947223 2022-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
20.106	Airport Improvement Program	$1.99M