EIN: 382439591
UEI: DNKLBDQLMUB5
Data as of August 22, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 28, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 28, 2023 (1091 days ago).
What is a management decision? →2017-001 ? Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Finding Type: Material weakness over financial reporting. Criteria: Management is responsible for establishing, maintaining, and monitoring internal controls, and for the fair presentation in the financial statements of financial position, results of operations, and cash flows, including the recording of all appropriate journal entries, so that the trial balances from which the audited financial statements are prepared, reflect amounts that are in conformity with U.S. generally accepted accounting principles. In addition, the Authority is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (the ?Schedule?). Condition/Finding: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the Schedule as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. This is a repeat finding. Cause: This condition was caused by the Authority?s decision to outsource the preparation of its annual financial statements to the external auditor rather than incur the costs of obtaining the necessary training and expertise required for the Authority to perform this task internally because outsourcing the task is considered more cost effective. Effect: The financial statements, and Schedule of Expenditures of Federal Awards, were initially materially misstated until adjusting entries were proposed during the audit. Recommendation: We recommend that management continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. View of Responsible Officials (Corrective Action): Management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation.
Show full finding ▾Hide full finding ▴2017-001 ? Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Finding Type: Material weakness over financial reporting. Criteria: Management is responsible for establishing, maintaining, and monitoring internal controls, and for the fair presentation in the financial statements of financial position, results of operations, and cash flows, including the recording of all appropriate journal entries, so that the trial balances from which the audited financial statements are prepared, reflect amounts that are in conformity with U.S. generally accepted accounting principles. In addition, the Authority is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (the ?Schedule?). Condition/Finding: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the Schedule as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. This is a repeat finding. Cause: This condition was caused by the Authority?s decision to outsource the preparation of its annual financial statements to the external auditor rather than incur the costs of obtaining the necessary training and expertise required for the Authority to perform this task internally because outsourcing the task is considered more cost effective. Effect: The financial statements, and Schedule of Expenditures of Federal Awards, were initially materially misstated until adjusting entries were proposed during the audit. Recommendation: We recommend that management continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. View of Responsible Officials (Corrective Action): Management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation.
Finding: 2017-001 - Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Auditor Description of Condition and Effect: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the schedule of expenditures of federal awards, as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP, as well as the Uniform Guidance, is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. Auditor Recommendation: The Authority should continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. Corrective Action: We concur with the finding and management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation. Responsible Person: Becky Freeman ? Office Manager Anticipated Completion Date: June 30, 2023
2021-001
FAC accepted this audit on January 3, 2022 — management decision was due July 3, 2022.
2017-001 ? Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Finding Type: Material weakness over financial reporting. Criteria: Management is responsible for establishing, maintaining, and monitoring internal controls, and for the fair presentation in the financial statements of financial position, results of operations, and cash flows, including the recording of all appropriate journal entries, so that the trial balances from which the audited financial statements are prepared, reflect amounts that are in conformity with U.S. generally accepted accounting principles. In addition, the Authority is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (the ?Schedule?). Condition/Finding: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the Schedule as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. This is a repeat finding. Cause: This condition was caused by the Authority?s decision to outsource the preparation of its annual financial statements to the external auditor rather than incur the costs of obtaining the necessary training and expertise required for the Authority to perform this task internally because outsourcing the task is considered more cost effective. Effect: The financial statements, and Schedule of Expenditures of Federal Awards, were initially materially misstated until adjusting entries were proposed during the audit. Recommendation: We recommend that management continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. View of Responsible Officials (Corrective Action): Management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation.
Show full finding ▾Hide full finding ▴2017-001 ? Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Finding Type: Material weakness over financial reporting. Criteria: Management is responsible for establishing, maintaining, and monitoring internal controls, and for the fair presentation in the financial statements of financial position, results of operations, and cash flows, including the recording of all appropriate journal entries, so that the trial balances from which the audited financial statements are prepared, reflect amounts that are in conformity with U.S. generally accepted accounting principles. In addition, the Authority is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (the ?Schedule?). Condition/Finding: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the Schedule as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. This is a repeat finding. Cause: This condition was caused by the Authority?s decision to outsource the preparation of its annual financial statements to the external auditor rather than incur the costs of obtaining the necessary training and expertise required for the Authority to perform this task internally because outsourcing the task is considered more cost effective. Effect: The financial statements, and Schedule of Expenditures of Federal Awards, were initially materially misstated until adjusting entries were proposed during the audit. Recommendation: We recommend that management continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. View of Responsible Officials (Corrective Action): Management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation.
November 29, 2021 CORRECTIVE ACTION PLAN Pursuant to federal regulations, Uniform Administrative Requirements Section 200.511, the following is the finding, as noted in the White Cloud / Sherman Utilities Authority?s Single Audit report for the year ended June 30, 2021, and corrective action to be completed. Finding: 2017-001 - Material Audit Adjustments, Financial Statement Preparation, and Preparation of the Schedule of Expenditures of Federal Awards (Repeat Finding) Auditor Description of Condition and Effect: We prepared, and management approved of, significant adjustments to the Authority?s general ledger. Material adjustments were discovered during the audit process and because of this condition, the Authority is not in compliance with the required written procedures under the Uniform Guidance. As is the case with many small and medium-sized governmental units, the Authority has historically relied on its independent external auditor to assist with the preparation of the financial statements, the related notes, the management?s discussion and analysis, and, when applicable, the schedule of expenditures of federal awards, as part of its external financial reporting process. Accordingly, the Authority?s ability to prepare financial statements in accordance with GAAP, as well as the Uniform Guidance, is based, in part, on its reliance on its external auditor, who cannot, by definition, be considered part of the Authority?s internal controls. Having the auditor draft the annual financial statements is allowable under current auditing standards and ethical guidelines and may be the most efficient and effective method for preparation of the Authority?s financial statements. However, when an entity (on its own) lacks the ability to produce financial statements that conform to GAAP, or when material audit adjustments are identified by the auditor, auditing standards require that such conditions be communicated in writing as material weaknesses. Auditor Recommendation: The Authority should continue to monitor the relative costs and benefits of securing the internal or other external resources necessary to develop material adjustments and prepare a draft of the Authority?s annual financial statements versus contracting with its auditor for these services. Corrective Action: We concur with the finding and management has made an ongoing evaluation of the respective costs and benefits of obtaining internal or external resources, specifically for the preparation of financial statements, and has determined that the additional benefits derived from implementing such a system would not outweigh the costs incurred to do so. Management will continue to review the draft financial statements and notes prior to approving them and accepting responsibility for their content and presentation. Responsible Person: Becky Freeman ? Office Manager Anticipated Completion Date: June 30, 2022
2020-001
2021-001 ? Written Policies Required by the Uniform Guidance Finding Type: Immaterial Noncompliance. Criteria: The Uniform Guidance requires written policies pertaining to allowability of costs, payments, and compensation charged to federal programs (?200.302(7)) Condition/Finding: A formal written policy covering payments to contractors (purchasing policy) and a formal written policy covering loan funds received from USDA (cash management policy) are required by the Uniform Guidance. Cause: This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect: As a result of the condition, the Authority did not fully comply with the Uniform Guidance. Recommendation: We recommend that the Authority ensures these policies are updated to conform with the Uniform Guidance as soon as practical, but no later than the end of fiscal year 2022. View of Responsible Officials (Corrective Action): We concur with the recommendation and will update our written policies so that they conform with the Uniform Guidance.
Show full finding ▾Hide full finding ▴2021-001 ? Written Policies Required by the Uniform Guidance Finding Type: Immaterial Noncompliance. Criteria: The Uniform Guidance requires written policies pertaining to allowability of costs, payments, and compensation charged to federal programs (?200.302(7)) Condition/Finding: A formal written policy covering payments to contractors (purchasing policy) and a formal written policy covering loan funds received from USDA (cash management policy) are required by the Uniform Guidance. Cause: This condition appears to be the result of a time lag in identifying the requirement and developing a plan for compliance. Effect: As a result of the condition, the Authority did not fully comply with the Uniform Guidance. Recommendation: We recommend that the Authority ensures these policies are updated to conform with the Uniform Guidance as soon as practical, but no later than the end of fiscal year 2022. View of Responsible Officials (Corrective Action): We concur with the recommendation and will update our written policies so that they conform with the Uniform Guidance.
Finding: 2021-001 ? Written Policies Required by the Uniform Guidance Auditor Description of Condition and Effect: A formal written policy covering payments to contractors (purchasing policy) and a formal written policy covering loan funds received from USDA (cash management policy) are required by the Uniform Guidance. Auditor Recommendation: We recommend that the Authority ensures these policies are updated to conform with the Uniform Guidance as soon as practical, but no later than the end of fiscal year 2022. Corrective Action: We concur with the recommendation and will update our written policies so that they conform with the Uniform Guidance. Responsible Person: Becky Freeman ? Office Manager Anticipated Completion Date: June 30, 2022
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