Finding Text
Criteria As described in our engagement letter, management is responsible for establishing and maintaining internal controls, including monitoring, and for the fair presentation of the schedule of expenditures of federal awards, in conformity with the cash basis of accounting. Condition The District does not have a system of internal control that would provide management with reasonable assurance that the District?s schedule of expenditures of federal awards and related disclosures are complete and presented in accordance with the cash basis of accounting. As such, management requested us to compile the trial balance from the general ledger and prepare a draft of the schedule of expenditure of federal awards, including the related note disclosures. Cause Management does not prepare the schedule of expenditures of federal awards or track the federal expenditures to ensure all expenditures are included within the proper federal expenditure accounts. There were also several mispostings with the federal grant expenditures. Potential Effect The potential exists that a material misstatement of the schedule of expenditures of federal awards could occur and not be prevented or detected by the District?s internal control. Recommendation We recommend that the District review and approve the proposed auditor adjusting entries and the adequacy of schedule of the expenditures of federal awards disclosures prepared by the auditors, among other procedures as considered necessary by management. The District should also use the correct coding provided by NDE for tracking the federal expenditures.