Finding 952295 (2022-002)

Audit finding 2022-002 - Material Audit Adjustment Criteria: Internal controls over financial reporting should exist to ensure that material misstatements are prevented, detected, and corrected by management in a timely manner. Condition: Audit procedures over long-term obligations, pension reporting, and unrestricted net position identified several errors, misclassifications and unrecorded liabilities that resulted in material adjustments. We proposed material audit adjustments that would not have been identified as a result of the Authority's existing internal control system and, therefore, could have resulted in a material misstatement of the Authority's financial statements. The material misstatements detected as a result of audit procedures were corrected by management. Cause: The Authority did not have the proper controls in place to detect misstatements in the financial statements.Effect: The accounting records for the long-term obligations, pension reporting, and unrestricted net position required material adjustments to be proposed and recorded in order for the financial statements to be fairly presented in accordance with accounting principles generally accepted in the United States of America. Recommendation: We would recommend the Authority review all adjusting entries posted and make all such necessary adjustments in the future. We would recommend the Executive Director monitor all financial activity and adjust account balances as needed throughout the year and at year-end to prevent misstatements from occurring. Views of Responsible Official: Management agrees with the finding. The Authority will review all adjusting entries posted and make all such necessary adjustments in the future. The Executive Director will continue to monitor all financial activity and adjust account balances as needed throughout the year and at year-end to prevent misstatements from occurring.