Finding Text
Criteria Management is responsible for the preparation and fair presentation of the District?s financial statements in accordance with accounting principles generally accepted (?GAAP?) in the United States of America. In addition, the Uniform Guidance requires that the auditee prepare the SEFA. Condition As a non-attest service to the District, the District?s external auditors prepare the financial statements, and the SEFA. Cause It is not unusual for small governments not to have the expertise needed to prepare GAAP based financial statements and the SEFA and to rely on outside consultants for assistance. Effect Without auditor?s assistance, the District?s financial statements and SEFA would be materially misstated. In addition, the condition has the potential to impair the independence of the auditor, if the appropriate procedures are not completed by the District. Recommendations The District should perform detail review of the financial statements and SEFA, including proposed journal entries. The District should also oversee all nonattest services and to seek consultation from other professionals as warranted. Management Response The District agrees with the finding. The District engages consultants who possess industry knowledge and expertise. In addition, the District agrees to oversee all nonattest services.