Finding Text
Finding Type: Significant deficiency in internal controls over financial reporting.
Criteria: Management is responsible for maintain its accounting records in accordance with generally
accepted accounting principles (GAAP).
Conditions and context: It is important to perform a physical inventory count on a regular basis to confirm
that recorded balances in the detailed inventory account reflect items actually on hand. On at least an
annual basis, the District performs a physical inventory count. However, there are no written procedures
documenting how inventory count should be performed.
Cause of condition: The condition was caused by lack of oversight and misunderstanding around the
inventory process.
Effect of Condition: As a result of this condition, the District lacks internal controls over inventory.
Recommendation: To ensure that the count is performed properly, and to use as a training tool for new
staff, we recommend the District formalize and document procedures for performing a physical count of
its inventory.
View of Responsible Officials and Planned Corrective Action: Our inventory was tracked and managed by
an outside consultant. Corrective action includes implementing an integrated inventory and
accounting system and performing reconciliations of inventory reports to actual physical counts
annually.
Planned Implementation Date of Corrective Action: We are prepared for a year end reconciliation and
physical count of inventory. These steps were put in place within the first quarter of 2024.
Person Responsible for Corrective Action: Jennille Smith, Executive Director