Elm Hill Water District

Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both Susan Zammarelli, Treasurer and Edward Guries, Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations. Views of Responsible Officials and Corrective Action: The District will strive to segregate as many accounting functions as practical with the limited staff available.

Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements including footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. . Recommendation: The District should appoint a competent individual, such as Edward Guries, Superintendent who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities. Views of Responsible Officials and Corrective Action: The District will strive to gain necessary knowledge needed to prepare a full set of financial statements. The District will appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.

Statement of Condition: Significant Deficiency - The District is not consistently implementing the water shut-off policy. Criteria: Proper internal controls over the water shut-off policy would allow timely water shut-off’s and receipts of outstanding balances. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The District does not have the staff to be able to perform all water shut-off’s at one time. Recommendation: Edward Guries, Superintendent should develop a system for scheduling water shut-off’s so that they will occur in accordance with the water shut-off policy. Views of Responsible Officials and Corrective Action: The District will strive to implement the water shut-off policy consistently.

Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both Susan Zammarelli, Treasurer and Edward Guries, Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations. Views of Responsible Officials and Corrective Action: The District will strive to segregate as many accounting functions as practical with the limited staff available.

Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements including footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. Recommendation: The District should appoint a competent individual, such as Edward Guries, Superintendent who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities. Views of Responsible Officials and Corrective Action: The District will strive to gain necessary knowledge needed to prepare a full set of financial statements. The District will appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.

Findings 2022-001 Segregation of Duties Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both the Treasurer and the Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations. Views of Responsible Officials and Corrective Action: The District will strive to segregate as many accounting functions as practical with the limited staff available.

Findings 2022-002 Drafting of Financial Statements Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements including footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. Recommendation: The District should appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities. Views of Responsible Officials and Corrective Action: The District will strive to gain necessary knowledge needed to prepare a full set of financial statements. The District will appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.

Findings 2021-001 Segregation of Duties Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both the Treasurer and the Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations.

Findings 2021-002 Drafting of Financial Statements Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements included footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Findings 2021-002 Drafting of Financial Statements (Continued): Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. Recommendation: The District should appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.

Findings 2021-003 Collection Policy Statement of Condition: Significant Deficiency - The District application of the customer collection policy is not consistent. Criteria: Proper internal controls over accounts receivable collections would allow for the District to collect money owed in a timely manner. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Superintendent is a customer of the District and has an unpaid balance. Recommendation: The District should implement a policy that the Superintendent should set up a budgeted payment plan.

Findings 2020-001 Segregation of Duties Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both the Treasurer and the Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations. Views of Responsible Officials and Corrective Action: The District will strive to segregate as many accounting functions as practical with the limited staff available.

Findings 2020-002 Drafting of Financial Statements Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements included footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. Recommendation: The District should appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities. Views of Responsible Officials and Corrective Action: The District will strive to gain necessary knowledge needed to prepare a full set of financial statements. The District will appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.

Findings 2019-1 Segregation of Duties Statement of Condition: Significant Deficiency - The District does not have sufficient staff base to properly segregate accounting functions. Criteria: Proper internal controls over accounting transactions would include the ability to segregate certain accounting functions in order to protect assets. Effect: The results of our tests revealed no questioned costs or material misstatements. Cause: The Treasurer records all financial transactions. Recommendation: Both the Treasurer and the Superintendent should be involved in the daily financial affairs of the District to include monthly ledgers, financial statements, bank statements and bank reconciliations.

Findings 2019-2 Drafting of Financial Statements Statement of Condition: Significant Deficiency - The District does not have an internal control system designed to provide for the preparation of the financial statements and related financial statement disclosures. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements. Criteria: Proper internal controls over financial reporting would include the ability to prepare financial statements included footnote disclosures. Effect: Although this circumstance is not unusual for a District of this size, the preparation of financial statements as a part of the audit engagement may result in financial statements and related information included in financial statements disclosures not being available for management purposes as timely as it would be if prepared by District personnel. Cause: The personnel of the District do not possess the knowledge or tools to prepare financial statement footnotes and required schedules. Recommendation: The District should appoint a competent individual who possesses the skill knowledge and experience to review and approve the draft reports and assume all relevant management responsibilities.