City of Wood LakeLocal Government

Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation that it is not cost effective for the City to prepare the financial statements and maintain a working knowledge of the required disclosures.

Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation that it is not cost effective for the City to maintain proper segregation of duties.

Criteria: The City does not have the internal resources to identify all journal entries required to maintain a general ledger and to prepare the full-disclosure financial statements in conformity with generally accepted accounting principles. Condition: The City's personnel prepare periodic financial information for internal use that meets the needs of management and the City Council. However, the City does not have internal resources to identify all journal entries required to maintain a general ledger and prepare full-disclosure financial statements required by generally accepted accounting principles for external reporting. The City is aware of this significant deficiency, and obtains our assistance in the preparation of the City's annual financial statements. Cause: The City does not have the internal expertise needed to handle all aspects of the external financial reporting. Effect or Potential Effect: The City's management is aware of the deficiency and addresses it by reviewing and approving the adjusting journal entries and completed statements prior to distribution to the end users. Questioned Cost: None. Context: During our audit, adjustments were made to the trial balance to prepare financial statements. Repeat of Prior-Year Finding: 2021-002 Recommendations: For entities of the City's size, it generally is not practical to obtain the internal expertise needed to handle all aspects of the external financial reporting. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation that it is not cost effective for the City to prepare the financial statements and maintain a working knowledge of the required disclosures.

Criteria: Internal control that supports the City's ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements requires adequate segregation of accounting duties. Condition: The City does not have adequate segregation of accounting duties. Cause: There are a limited number of office employees. Effect or Potential Effect: The lack of adequate segregation of accounting duties could adversely affect the City's ability to initiate, record, process and report financial data consistent with the assertions of management in the financial statements. Questioned Cost: None. Context: During our audit, we noted the City does not maintain proper separation within the accounting function of the City to ensure proper segregation of accounting duties. Repeat of Prior-Year Finding: 2021-001 Recommendations: For entities of the City's size, it generally is not practical to obtain the internal control that supports the adequate segregation of duties. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation that it is not cost effective for the City to maintain proper segregation of duties.