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Sample Government, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS-FEDERAL A WARDS AND STATE FINANCIAL ASSISTANCE PROJECTS SECTION II - FINANCIAL STATEMENT FINDINGS Significant Deficiency 2007-01 Prior Period Adjustments Criteria Revenues in the governmental funds are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter (60 days) to pay liabilities of the current period. As such, certain State shared revenues, received within 60 days of the fiscal year end that are applicable to the fiscal year under audit, should be recorded as a receivable and a revenue. The government-wide and proprietary fund financial statements are prepared using the accrual basis of accounting. Under this method of accounting, expenses are recorded when a liability is incurred, regardless of the timing of cash flows. Condition Our audit procedures included the performance of procedures on the amounts recorded as assets, liabilities, revenues, expenditures/expense and fund balances/net assets amongst the various funds and governmental activities of the City. As a result of our audit procedures, the following prior period adjustments were recorded: . The improper period recognition of certain revenues received through the State for the fiscal year ended September 30, 2006 resulted in prior period adjustments of $1.266 million in the General Fund and $345,204 in the Transportation Fund. In both instances, fund balance previously reported was increased. . An incorrect calculation of revenue allocations from the General Fund to the Five Year Capital Improvement Fund and the Right of Way Beautification Fund resulted in prior period adjustments as follows - General Fund - decrease in the previously reported fund balance of $529,808; Five Year Capital Improvement Fund - increase in the previously reported fund balance of $218,488; Right of Way Beautification Fund - increase in the previously reported fund balance of$311 ,320, . The incurred but not reported claims (lag) for health claims was not reflected as a liability as of September 30,2006, This correction resulted in a prior period adjustment in the Internal Service Fund for Self-Insurance Programs totaling $1.454 million, a reduction of the net assets previously reported. . The liabilities for compensatory time and FICA on the compensated absences were not recorded as of September 30, 2006. This correction resulted in a prior period adjustment in the Governmental Activities of $1.11 7 million, a reduction to net assets previously reported. . The accretion on the capital appreciation bonds was not properly recorded as of September 30, 2006, This resulted in a prior period adjustment of $5.509 million in the Governmental Activities, a reduction to net assets previously reported.