Finding 385030 (2023-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-03-26
Audit: 298115
Organization: Newell School District (SD)

AI Summary

  • Core Issue: Management is responsible for preparing financial statements, but the audit team is doing this work, which poses a risk of material misstatement.
  • Impacted Requirements: Compliance with reporting standards for the Elementary and Secondary School Emergency Relief (ESSER) program is at risk due to this ongoing issue.
  • Recommended Follow-Up: Management should thoroughly review the draft financial statements and disclosures, ensuring accuracy and understanding of accounting guidance to mitigate risks.

Finding Text

2023-003 FINDING: Preparation of Financial Statements and Schedule of Expenditures of Federal Awards. Federal Program Affected: Elementary and Secondary School Emergency Relief (ESSER) Compliance Requirement: Reporting Questioned Costs: None Condition and Cause: As in prior years, we were requested to draft the audited financial statements, and related footnote disclosures and SEFA as part of our regular audit services. Additionally, we were requested to draft the schedule of expenditures of federal awards. Ultimately, it is management’s responsibility to provide for the preparation of the District’s statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements. From a practical standpoint, we do both for the District at the same time in connection with our audit. This is not unusual for us to do with organizations of the District’s size. Criteria and Effect: It is our responsibility to inform the School Board this deficiency could result in a material misstatement to the financial statements that would have not been prevented or detected by the District’s management. Repeat Finding from Prior Year: Yes, prior year finding 2022-003. Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared financials in detail for their accuracy; we have answered any questions they might have, and have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of classification and disclosure in the District’s financial statements. We are satisfied that the appropriate steps have been taken to provide the District with the completed financial statements. It is the responsibility of management and the School Board to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Response/Corrective Action Plan: The District agrees with the above finding. See Corrective Action Plan. (SEFA)

Categories

Reporting

Other Findings in this Audit

  • 385027 2023-003
    Material Weakness Repeat
  • 385028 2023-004
    Material Weakness Repeat
  • 385029 2023-004
    Material Weakness Repeat
  • 961469 2023-003
    Material Weakness Repeat
  • 961470 2023-004
    Material Weakness Repeat
  • 961471 2023-004
    Material Weakness Repeat
  • 961472 2023-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.425 Education Stabilization Fund $363,355
84.010 Title I Grants to Local Educational Agencies $147,590
10.555 National School Lunch Program $66,202
15.227 Distribution of Receipts to State and Local Governments $50,506
84.027 Special Education_grants to States $37,341
84.367 Improving Teacher Quality State Grants $29,466
84.048 Career and Technical Education -- Basic Grants to States $27,991
84.424 Student Support and Academic Enrichment Program $16,386
10.553 School Breakfast Program $14,907
15.226 Payments in Lieu of Taxes $12,426
10.582 Fresh Fruit and Vegetable Program $8,469
97.067 Homeland Security Grant Program $7,814
84.173 Special Education_preschool Grants $1,205
10.575 Farm to School Grant Program $1,004