Finding Text
Finding: 2022-003 Annual Financial Reporting Under Generally Accepted Accounting Principles (GAAP) Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The City does not have an internal control policy in place over annual financial reporting that would enable management to conclude its annual financial statements and related footnote disclosures are complete and presented in accordance with GAAP. Criteria: The City is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements included related disclosures, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: The City relies on the audit firm to prepare the annual financial statements and related footnote disclosures. However, they have designated an individual with suitable skill, knowledge, or experience to oversee their preparation and have reviewed, approved, and accepted responsibility for the annual financial statements and the related footnote disclosures. Effect: The potential exists that a material misstatement of the annual financial statements could occur and not be prevented or detected by the City?s internal controls. Recommendation: The City should continue to evaluate its internal staff and expertise to determine if an internal control policy over the annual financial reporting is beneficial. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to prepare the annual financial statements and related footnote disclosures in accordance with GAAP. Management will review, approve, and accept responsibility for these financial statements and related footnote disclosures prior to issuance. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.