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<br />Sample Government, FLORIDA <br /> <br />SCHEDULE OF FINDINGS AND QUESTIONED COSTS <br />(Continued) <br /> <br />SECTION II - FINANCIAL STATEMENT FINDINGS <br /> <br />Significant Deficiencies <br /> <br />09-01 Financial Records <br /> <br />Criteria <br /> <br />Prudent policies include a formal closing process with supervisory Finance Department personnel being <br />responsible for the review of transactions and balances recorded. Accounting tasks such as monthly <br />reconciliations, cross-checks, and reviews playa key role in proving the accuracy of accounting data and <br />financial information that comprise interim and year-end financial statements, <br /> <br />Condition <br /> <br />Our audit procedures included the performance of extensive procedures on the amounts recorded as <br />assets, liabilities, revenues, expenditures/expenses and fund balances/net assets among the various funds <br />of the City. Our findings are as follows, <br /> <br />. Numerous adjustments were required to properly reflect the balances of the capital assets of the <br />governmental activities, the Utility Fund and the Cultural Arts Fund. <br /> <br />. Significant adjustments were required in the governmental activities and the Utility Fund to <br />properly reflect the transactions related to the new capital lease entered into by the City during the <br />2009 fiscal year. <br /> <br />. There were an excessive amount of adjusting entries prepared by the City's accounting staff to <br />correct various account balances after the trial balances for the City's funds were provided to the <br />auditors. <br /> <br />Cause <br /> <br />Regarding the capital assets, an outside consultant updates and maintains a complete capital asset listing <br />for the City. After the start of the audit for the current year, the City was still having the consultant <br />modify and make corrections to the listing based on the City's review of the information which was why <br />many of the adjustments occurred after the start of the audit. The new capital lease transaction was a <br />complex transaction and as such, required a thorough understanding of the agreement entered into to <br />ensure the transaction was properly recorded. <br /> <br />Additionally, general ledger accounts were not reviewed to determine and record the required <br />adjustments prior to producing the final trial balances. <br /> <br />1 <br />