Finding Text
INTERNAL CONTROL OVER SCHEDULE OF EXPENDITURES OF FEDERAL
AWARDS PREPARATION AND REVIEW
Criteria
As described in our engagement letter, management is responsible for
establishing and maintaining internal controls, including monitoring, and for
the fair presentation of the schedule of expenditures of federal awards,
including the notes to the schedule of expenditures of federal awards, in
conformity with the modified cash basis of accounting.
Condition
The District does not have a system of internal control that would provide
management with reasonable assurance that the District's schedule of
expenditures of federal awards and related disclosures are complete and
presented in accordance with the modified cash basis of accounting.
As such, management requested us to compile the trial balance from the
general ledger and prepare a draft of the schedule of expenditures of
federal awards, including the related note disclosures.
Cause
Management does not prepare the schedule of expenditures of federal
awards in accordance with the modified cash basis of accounting.
Potential Effect
The potential exists that a material misstatement of the schedule of
expenditures of federal awards could occur and not be prevented or
detected by the District's internal control.
Recommendation
We recommend that the District review and approve the proposed auditor
adjusting entries and the adequacy of schedule of the expenditures of
federal awards disclosures prepared by the auditors and apply analytic
procedures to the draft financial statements, among other procedures as
considered necessary by management.
Views of Responsible Officials and Planned Corrective Actions
The District relies on the auditor to propose adjustments necessary to
prepare the schedule of expenditures of federal awards including the
related note disclosures. The District reviews schedule of expenditures of
federal awards and approves all adjustments.