Village of Villa ParkLocal Government

Finding 2023 – 001: Restatement to Fund Balance Condition: During audit fieldwork, our testing resulted in a restatement of fund balance in order to correct insurance expenses improperly recorded in prior years. Criteria: A good system of internal controls would provide for accurate recording and reporting of insurance expenses on a regular basis in order to provide for accurate financial reporting. Cause: Year-end entries related to prepaid insurance were required in order to accurately present the Village’s financial statements. Effect: A material adjustment to the Village’s beginning fund balance was required to properly state insurance expense. Recommendation: We recommend the Village implement effective internal controls in order to provide an accurate assessment of reporting requirements. This implementation of improved controls would result in the appropriate recognition for financial reporting requirements. Corrective Action Plan: The Village and finance director will implement internal controls to properly record insurance expenses, payables, and prepaid expenses on a timely basis prior to audit fieldwork.

Finding 2023 – 002: Audit Journal Entries Condition: During audit fieldwork, our testing resulted in audit adjustments in order to present materially accurate financial statements. Criteria: A good system of internal controls would provide for accurate representations of adjusted account balances for all Village accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required in order to accurately present the Village’s financial statements. Effect: The Village’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the Village’s financial activities and resources. Corrective Action Plan: The Finance Director, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork.