FAC Explorer

Finding 497563 (2023-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-09-23
Audit: 320337
Organization: City of Sherburn (MN)
Auditor: Burkhardt & Burkhardt LTD

AI Summary

  • Core Issue: The City approved corrections for misstatements, indicating a lack of effective controls.
  • Impacted Requirements: The City must have controls to prevent and detect material misstatements in financial statements.
  • Recommended Follow-Up: Evaluate and enhance internal control processes to ensure accurate year-end account adjustments per GAAP.

Finding Text

Material Audit Adjustments Condition: The audit firm proposed and the City approved corrections of certain misstatements. Criteria The City should have controls in place to prevent and detect a material misstatement in the financial statements in a timely manner. Management is responsible for the accuracy and completeness of all financial records and related information. Their responsibility includes adjusting the financial statements to correct material misstatements. Cause: The City has not established controls to ensure that all accounts are adjusted to their appropriate year-end balances in accordance with GAAP. Effect: The design of internal control over completeness and accuracy of financial records could adversely affect the City’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Recommendation: The City should continue to evaluate its internal controls processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year end balances in accordance with GAAP.

Corrective Action Plan

Explanation of Disagreement with Audit Finding: None Actions Planned in Response to Finding: The City will continue to review and approve adjusting journal entries as proposed by the auditor, as well as taking responsibility for the audited financial statements. Official Responsible for Ensuring CAP: Leslie Heffele, City Administrator Planned Completion Date for CAP: December 31, 2024 Plan to Monitor Completion of CAP: City Council

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 497564 2023-002
    Material Weakness
  • 497565 2023-003
    Significant Deficiency
  • 497566 2023-004
    Significant Deficiency
  • 497567 2023-001
    Material Weakness
  • 497568 2023-002
    Material Weakness
  • 497569 2023-003
    Significant Deficiency
  • 497570 2023-004
    Significant Deficiency
  • 497571 2023-001
    Material Weakness
  • 497572 2023-002
    Material Weakness
  • 497573 2023-003
    Significant Deficiency
  • 497574 2023-004
    Significant Deficiency
  • 1074005 2023-001
    Material Weakness
  • 1074006 2023-002
    Material Weakness
  • 1074007 2023-003
    Significant Deficiency
  • 1074008 2023-004
    Significant Deficiency
  • 1074009 2023-001
    Material Weakness
  • 1074010 2023-002
    Material Weakness
  • 1074011 2023-003
    Significant Deficiency
  • 1074012 2023-004
    Significant Deficiency
  • 1074013 2023-001
    Material Weakness
  • 1074014 2023-002
    Material Weakness
  • 1074015 2023-003
    Significant Deficiency
  • 1074016 2023-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
66.468 Drinking Water State Revolving Fund $1.02M
93.778 Medical Assistance Program $5,622
10.698 State & Private Forestry Cooperative Fire Assistance $1,450