By Aberdeen Insider - October 24, 2024 in STATE OF SOUTH DAKOTA
NOTICE OF AUDIT
OF THE FISCAL AFFAIRS OF THE
CITY OF ABERDEEN
Notice is hereby given that the records and books of account of the City of Aberdeen, South Dakota, have been audited by Eide Bailly, LLP, Certified Public Accountants of Aberdeen, South Dakota for the year ended December 31, 2023. A detailed report thereon, containing additional information, is filed with the City of Aberdeen and the Department of Legislative Audit in Pierre, South Dakota for public inspection.
The following findings and recommendations referred to in the report are hereby listed in accordance with the provisions of SDCL 4-11-12.
CURRENT AUDIT FINDINGS AND RECOMMENDATIONS
Finding:
During the course of our engagement, we assisted with drafting the financial statements and made certain corrections to the schedule of expenditures of federal awards.
Recommendation:
We recommend continued training specific to governmental accounting principles so that applicable staff are able to ensure financial statements and the schedule of expenditures of federal awards are materially correct. In addition, a thorough review of the transactions and balances in each fund should take place prior to the beginning of the audit to ensure that generally accepted accounting principles have been followed for each fund type, especially for transaction types that are infrequent in occurrence. However, ultimately, it is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations.
Corrective Action Plan:
Responsible Individuals: Jordan McQuillen, Finance Officer
Corrective Action Plan: Due to cost considerations and staffing model, we will continue to request Eide Bailly LLP assist in preparing our audited financial statements and accompanying notes as part of their annual audit. Management will annually review the drafted financial statements and accompanying notes, any recommended financial statement adjustments and corrections to the schedule of expenditures of federal awards, and we have reviewed and agree with the financial statement adjustments and corrections to the schedule of expenditures of federal awards proposed during the audit.
Anticipated Completion Date: Ongoing
Finding:
During the course or our engagement, we proposed audit adjustments, both material and non-material, to the City’s recorded account balances which, if not recorded, would have resulted in misstatements of the City’s financial statements. Of those adjustments identified were adjustments to restate beginning net position for errors identified in the prior-year financial statements. There were also certain misstatements identified, not material but more than trivial in amount, that were not corrected within the financial statements by the election of management as they were deemed immaterial to the financial statements as a whole and each individual opinion unit.
Recommendation:
We recommend continued training specific to governmental accounting principles so that applicable staff are able to ensure financial statements and the schedule of expenditures of federal awards are materially correct. In addition, a thorough review of the transactions and balances in each fund should take place prior to the beginning of the audit to ensure that generally accepted accounting principles have been followed for each fund type, especially for transaction types that are infrequent in occurrence. However, ultimately, it is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations.
Corrective Action Plan:
Responsible Individuals: Jordan McQuillen, Finance Officer
Corrective Action Plan: To address this issue and enhance our controls we intend to conduct a comprehensive review of our existing controls to identify gaps and weaknesses. After review, we will develop and implement a control enhancement plan, prioritizing key control areas and addressing identified deficiencies promptly.
Anticipated Completion Date: September 2024
Finding:
During the course of our engagement, numerous issues and errors related to the recording of capital assets were identified which resulted in numerous and material audit adjustments. Additionally, capital asset schedules were not prepared by management correctly and were not properly reconciled to the general ledger, thus needing significant revision and correction. The errors in capital assets and unreconciled capital assets resulted in delays in our audit testing over capital asset balances and, ultimately, a delay in our audit issuance.
Recommendation:
We recommend that the City provides increased training to accounting personnel regarding the accounting and reconciliation of capital assets and a review control be implemented to review all individual capital asset additions and disposals entered into the accounting system for accuracy, as well as a review of all of the year-end schedules and reconciliation of capital assets to the general ledger for financial reporting prior to the audit for accuracy and completeness.
Corrective Action Plan:
Responsible Individuals: Jordan McQuillen, Finance Officer
Corrective Action Plan: Review and enhance capital asset recording procedures to ensure accuracy and compliance with accounting standards. Provide training to staff responsible for capital asset recording to improve their understanding of proper recording and reconciliation processes. Develop a reconciliation process to regularly compare capital asset activity with general ledger accounts. Maintain accurate and detailed records of capital asset transactions for audit and reporting purposes.
Anticipated Completion Date: September 2024
RUSSELL A. OLSON, AUDITOR GENERAL
DEPARTMENT OF LEGISLATIVE AUDIT
Published twice on October 24 and October 31, 2024, at the total approximate cost of $107.35 and may be viewed free of charge at www.sdpublicnotices.com and www.aberdeeninsider.com