Finding 526659 (2024-002)

Finding #2024-002 – Material Audit Adjustments Condition: The audit proposed adjusting journal entries during the audit process to adjust District account balances. Specifically, material journal entries were made for year-end grants receivable and accounts payable related to the community safe room project. We deem these entries to be significant in relation to the financial statements. Since the District did not make these adjustments in its accounting system prior to the audit, a material weakness was determined to exist in the District’s internal controls. Effect: Financial reports generated by the accounting system may not provide an accurate reflection of the District’s financial position or activities Cause: Financial information was not recorded in a timely manner and numerous adjustments were needed in order to correct account balances Criteria: Material adjusting journal entries not prepared by the District before the audit are considered an internal control weakness Recommendation: Policies and procedures should be implemented to ensure account balances are properly recorded in a timely manner. Response: The District will establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditor in future years. Contact Person: Cale Jackson Anticipated Completion: Not Applicable