Finding Text
Condition: As part of the audit, adjustments were made to properly record fixed asset additions and depreciation.
The Project also engages Gordon, Stockman & Waugh, P.C. to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Gordon, Stockman & Waugh, P.C. cannot be considered part of the Project’s internal control system.
Criteria: A strong system of internal controls requires the Project to prepare its own financial statements and accompanying disclosures in accordance with accounting principles generally accepted in the United States of America.
Cause: The Project engages Gordon, Stockman & Waugh, P.C. to assist in this process as correction of this condition by the Project would require the employment of additional personnel. Consequently, corrective action may not be practical.
Effect: This increases the risk of material omissions or other errors in financial statements and accompanying disclosures.
Repeat Finding: Yes, prior year finding 2023-002
Recommendation: To establish proper internal control over the preparation of its financial statements, including disclosures, the Project should design and implement a comprehensive review procedure to ensure that the accounting records and financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable generally accepted accounting principles and knowledge of the Project’s activities and operations.
Management Response: This condition is inherent in operations which, for sound economic reasons, must function with a small number of office personnel. Correction of this condition would require the employment of additional office personnel. We will continue to monitor financial reports and accounting information as correction of this condition is not practical.