Finding 370782 (2023-001)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-02-27

Audit: 292423

Organization: Santa Maria Public Airport District (CA)

Auditor: C J Brown & Company CPAS

AI Summary

Issue: Grant revenue was not recognized correctly in the prior period due to inadequate tracking of expenditures and receipts.
Impacted Requirements: This oversight led to prior period adjustments and resulted in understated capital assets and accounts payable in 2021.
Recommended Follow-up: Establish a process to ensure proper tracking of grant expenditures and receipts for accurate year-end reporting.

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 year-end 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

947224 2023-001

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
20.106	Airport Improvement Program	$2.62M