FAC Explorer

Finding 479701 (2021-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2021
Accepted
2024-07-30
Audit: 316258
Organization: City of Pekin (IL)
Auditor: Lauterbach & Amen LLP

AI Summary

  • Issue: Fund balance needed restatement due to misallocated expenses between internal service funds.
  • Requirements Impacted: Internal controls must ensure accurate account balances before audits.
  • Follow-Up: Implement regular reviews and adjustments of general ledger balances to improve financial management.

Finding Text

Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct expenses in the correct internal service fund due between funds. Criteria: A good system of internal controls would provide for accurate representations of adjusted account balances for all City accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required in order to accurately present the City’s financial statements. Effect: The City’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the City’s financial activities and resources.

Corrective Action Plan

The Director of Finance, along with staff, will evaluate all revenues, receivables, payable, and expenses as part of the audit preparation process and prepare fully adjusted financial statements prior to audit fieldwork. The Finance Department will conduct monthly reconciliations and perform month end closing procedures to better prepare for audits. The month end closing procedures should ensure that all expenses are allocated appropriately between funds prior to year-end adjustments.

Categories

Cash Management Internal Control / Segregation of Duties

Other Findings in this Audit

  • 479702 2021-002
    Material Weakness
  • 479703 2021-003
    Material Weakness
  • 479704 2021-004
    Significant Deficiency Repeat
  • 1056143 2021-001
    Material Weakness Repeat
  • 1056144 2021-002
    Material Weakness
  • 1056145 2021-003
    Material Weakness
  • 1056146 2021-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
21.019 Coronavirus Relief Fund $735,100
14.218 Community Development Block Grants/entitlement Grants $208,943
20.205 Highway Planning and Construction $99,314
20.106 Airport Improvement Program $35,048
16.922 Equitable Sharing Program $908