Finding Text
Finding 2023-001
Significant Deficiency in Internal Controls Over Financial Reporting - Fiscal Year End Reporting
Repeat Findings: Yes, 2022-001
Criteria:
The City’s fiscal year end account balances should include all significant transactions from the reporting period and should be reconciled at fiscal year end.
Condition and Context:
While management informed us that adjustments would be required after the trial balances were provided to us for audit, adjustments took longer than expected. These adjustments were crucial to ensure the financial statements were complete and accurate.
Effect or Potential Effect:
The City’s account balances were misstated as and for the year ended June 30, 2023 prior to adjustments being made to correct such misstatements. The potential effect is that accurate information might not be available timely to make management decisions throughout the year as well as at year end.
Questioned Costs:
None.
Recommendation:
We recommend that the City review their internal controls processes and procedures over financial reporting to ensure all transactions are recorded in the City’s financial statements, and that their accounting and finance department is fully staffed to ensure timeliness of reporting.
Views of Responsible Officials:
The City agrees with the finding. See Section V for the corrective action plan.