Finding Text
Finding 2023-001: Restatement to Fund Balance
Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct
prior year accruals and deferrals related to property taxes, accounts payable, grant receivables, etc. that
were not included on the unadjusted trial balances.
Criteria: A good system of internal controls would provide for accurate recording of accruals and deferrals
on a regular basis in order to provide for accurate financial reporting.
Cause: Year-end entries related to property taxes, accounts payable, grant receivables, etc. were required
in order to accurately present the City’s financial statements.
Effect: A material adjustment to the City’s beginning fund balance was required to properly state the
City’s prior year end accruals and deferrals.
Recommendation: We recommend that the City implement effective internal controls in order to provide
an accurate assessment of reporting requirements for year-end accruals and deferrals. This implementation
of improved controls would result in the appropriate recognition of financial reporting requirements.
Corrective Action Plan: The City should implement internal controls to properly record necessary accruals
and deferrals on a timely basis prior to audit fieldwork. Additionally, the City Comptroller should provide
monthly reviews of the financial statements.