Finding 575352 (2024-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-09-02
Audit: 365401
Organization: City of McDonough (GA)

AI Summary

  • Core Issue: The City under-reported accounts payable for 2022-2024, totaling over $3.5 million, affecting financial accuracy.
  • Impacted Requirements: All expenses must be recorded in the period incurred, especially for federal awards with strict reporting rules.
  • Recommended Follow-Up: Management should enhance training and oversight for staff handling accounts payable to prevent future discrepancies.

Finding Text

2022.004 RECORDING OF ACCOUNTS PAYABLE-REPEAT FINDING Condition: Criteria: Effect: Cause: The City under-reported accounts payable as of June 30, 2022, 2023 and 2024 in the amounts of$673,150, $886,252 and $1,919,207 which are material to the City's financial statements. In addition, $1,200,327 of the $1,919,207 was costs related to a major federal awards program with reporting requirements under the single audit act. All expenditures / expenses should be recorded in the period the corresponding purchase/ service is incurred. The City's liabilities and expenditures I expenses for 2022 tlu·ough 2024 were understated by the above-mentioned amounts. The lack of training and over-sight of employees responsible for recording expenditures / expenses is the main reason for the under-repo1ting of accounts payable. Recommendation: Management should provide the necessary training and over-sight of employees responsible for recording accounts payable. View of responsible officials and planned corrective action: Management agrees with the finding. Management will ensure the employees with the responsibility over the recording of accounts payable are properly trained and supervised so that accounts payable and expenditures/ expenses are properly stated on the financial statements.

Corrective Action Plan

Finding: Accounts payable were under-reported in June 30, 2022, 2023, and 2024 in the amounts of $673,150, $886,252, and $1,919,207 which are material to the City's financial statements. Corrective Action Plan: Management agrees with this finding. The City makes adjustments to its accounts payable accounts through its normal operations and through its automated accounting system. Once the books and records are submitted to the audit firm, any unrecorded payables that come to the attention of the City or as a part of the normal audit process become audit journal entries and are subjectto being an audit finding. The City will worl< towards providing the audit firm more complete and accurate accounts payable balances prior to submission. In addition, the City has hired a full time Finance Director to provide both oversight during the year-end close out, and training throughout the year.

Categories

Procurement, Suspension & Debarment Reporting

Other Findings in this Audit

  • 575350 2024-004
    Material Weakness Repeat
  • 575351 2024-004
    Material Weakness Repeat
  • 1151792 2024-004
    Material Weakness Repeat
  • 1151793 2024-004
    Material Weakness Repeat
  • 1151794 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
66.468 Drinking Water State Revolving Fund $3.74M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.96M