Finding Text
FINDING #2023-001: Financial Statement and Schedule of Expenditure of Federal Awards (SEFA) Preparation
Federal Program Affected: Disaster Grants – Public Assistance (Presidentially Declared Disasters), ALN #97.036
Compliance Requirement: Reporting
Questioned Costs: None.
Condition and Cause: We were requested to draft the audited financial statements and related footnote disclosures as
part of our regular audit services. Additionally, during the course of our audit, there were significant adjustments made
to the SEFA. Ultimately, it is management’s responsibility to provide for the preparation of the City’s statements,
schedules and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those
statements. From a practical standpoint, we do both for the City at the same time in connection with our audit. This is
not unusual for us to do this with cities of your size.
Criteria and Effect: It is our responsibility to inform the Commission that this deficiency could result in a material
misstatement to the financial statements that could have been prevented or detected by the City’s management.
Repeat Finding from Prior Year: Yes, prior year finding #2022-001.
Recommendation: As in prior years, we have instructed management to review a draft of the auditor prepared
financials and adjusted SEFA in detail for their accuracy, we have answered any questions they might have, and we
have encouraged research of any accounting guidance in connection with the adequacy and appropriateness of
classification and disclosure in your statements. We are satisfied the appropriate steps have been taken to provide the
City with complete financial statements and SEFA. It is the responsibility of management and the Commission to
make the decision whether to accept the degree of risk associated with this condition because of cost or other
considerations.
Response/Corrective Action Plan: The City is in agreement with the finding. See Corrective Action Plan.