Finding Text
Finding 2023-001
Programs: All
Material Weakness over Financial Reporting
Repeat Finding: No
Condition:
The Authority did not record a transaction in the amount of $2.4 million during the year ended March 31, 2022 to record a loan receivable and revenue associated with a funding transaction. As a result, total assets and revenue were understated in fiscal year 2022, and the beginning net position as of April 1, 2022 needed to be restated in the fiscal year 2023 financial statements to record the transaction.
Criteria:
Entities must maintain an adequate system of internal controls over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles.
Cause:
There was inadequate interdepartmental communication within the Authority. Information regarding this transaction was not properly communicated throughout all necessary departments of the Authority.
Effect:
Total assets and revenue were understated in fiscal year 2022, and the beginning net position as of April 1, 2022 needed to be restated in the fiscal year 2023 financial statements to record the transaction.
Questioned Costs:
None.
Recommendation:
We recommend that this issue of lack of communication be investigated and that a solution be implemented as soon as possible. We recommend a regularly scheduled meeting of all department directors to discuss and review the recent and upcoming events in their respective areas to allow for a better flow of information between each department.
Management’s Response and Corrective Action Plan
Management agrees with the finding. See Schedule of Corrective Action Plan.