Finding Text
2022-001 - Inadequate Controls Over Financial Reporting Material Weakness in Internal Control Repeat of 9/30/21 Finding 2021-001 (originally reported at 9/30/19 as Finding 2019-004) Criteria: Management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. The Authority should have adequate internal controls in place to allow for timely and accurate financial reporting within a short time frame following the Authority?s year end and without auditor adjustment. Condition: Our audit identified deficiencies in the design and/or operation of internal controls that adversely affected the Authority?s ability to produce reliable financial statements. As a result, more than fifty audit adjustments and reclassifications were proposed that resulted in material changes to financial statement amounts as follows: ? Total assets increased by $358,336 ? Total liabilities increased by $227,891 ? Total equity decreased by $257,671 ? Total revenue increased by $81,191 ? Total expenses decreased by $306,925 Cause: Accounting personnel, being relatively new to the Authority, did not have adequate training or experience to prepare accurate financial reporting information in a timely manner Effect: Accurate and timely financials are not provided to those charged with governance and material audit adjustments were required to correct the financial statements. Questioned Costs: None. Recommendation: We recommend the Authority adopt policies and procedures that require timely financial reporting at the end of each month and fiscal year end. The procedures should include a full review of the balances as of the close of the year with reconciliations and workpapers prepared and agreed to supporting information. In order to accomplish this, the Authority should provide additional training to its accounting personnel. During the fiscal year, the Authority was assisted by an independent outside fee accountant with the monthly accounting and the closing of its year-end accounting for the federal programs, but was not involved with the other programs of the Authority. We recommend that the Authority also engage the fee accountant with the other programs of the Authority. Views of Responsible Officials of the Auditee: The Authority acknowledges this finding and will establish more review, oversight and training for the staff responsible for these procedures and will engage the outside fee accountant to assist with all programs.