Finding 964971 (2023-001)

2023-001 Material Weakness in Internal Control Criteria: Management is responsible for establishing and maintaining internal controls in the financial reporting system and for the fair presentation of the financial position, results of operations, and disclosures in the financial statements, in conformity with the cash basis of accounting. Condition: The District does not have an individual that has the ability to evaluate the completeness and accuracy of the statements presented in accordance with the cash basis of accounting. Cause: The District only has a volunteer board and has elected to outsource the preparation of the annual financial statements. Effect: The District must rely on its external auditors to determine adherence to applicable cash basis of accounting. Recommendation: We recommend management to continue to evaluate its resources and the need for staff with the knowledge and ability to prepare financial statements in accordance with cash basis of accounting. Grantee’s Response: Management concurs with this finding and will continue to evaluate the risk of outsourcing financial statement preparation versus the cost of staffing at this level.