Finding 561301 (2024-001)

Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct payroll liabilities that were improperly recorded in prior years. Criteria: A good system of internal controls would provide for accurate recording and reporting of payroll liabilities on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to payroll liabilities were required in order to accurately present the District’s financial statements. Effect: A material adjustment to the Council’s beginning fund balance was required to properly state payroll liabilities. Recommendation: We recommend the Council 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 Council and Director of Finance will implement internal controls to properly record payroll liabilities on a timely basis prior to audit fieldwork.