Finding 520093 (2023-001)

Finding 2023 – 001: Restatement to Fund Balance Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct insurance expenses improperly recorded in prior years. Criteria: A good system of internal controls would provide for accurate recording and reporting of insurance expenses on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to prepaid insurance were required in order to accurately present the Village’s financial statements. Effect: A material adjustment to the Village’s beginning fund balance was required to properly state insurance expense. Recommendation: We recommend the Village implement effective internal controls in order to provide an accurate assessment of reporting requirements. This implementation of improved controls would result in the appropriate recognition for financial reporting requirements. Corrective Action Plan: The Village and finance director will implement internal controls to properly record insurance expenses, payables, and prepaid expenses on a timely basis prior to audit fieldwork.