Finding 396583 (2023-002)

Preparation of Financial Statements Condition: The Village relies on its audit firm to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, the audit firm cannot be considered part of the Village’s internal control system. The Village’s personnel do not have sufficient financial reporting and accounting knowledge to perform a review of the financial statements and related disclosures to provide a high level of assurance that any potential material omissions or other errors would be identified and corrected.Criteria: Preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States of America.Effect: As a result of this condition, there is a higher risk that any potential material omissions or other errors would not be identified and corrected. Cause: The Village’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Village’s financial statements and related disclosures. However, it is not practical for the Village to hire additional employees just to improve financial statement preparation abilities. Recommendation: When this condition exists, management’s close supervision and review of accounting information and regular discussions with its assurance service providers concerning new accounting principles is the best means of preventing and detecting potential material omissions or other errors.