South Wind Water and Sewer DistrictNon-Profit

Condition: Based on the prior audit report (2017) and discussion with the District, an adjusting journal entry was made to correctly record Grants Receivable in the June 30, 2017, audit report. Grants Receivable were adjusted and recorded at $133,155 for the fiscal year ended June 30, 2017. This balance remained on the District’s financial statements, resulting in an overstatement of Grants Receivable. Criteria: Correctly and accurately recording journal entries into the General Ledger. Effect: The District Grants Receivable account does not reconcile with any documentation provided. Cause: Management failed to correctly record the account balance for Grants Receivables Recommendations: We recommend at year-end, the Board and bookkeeper review and reconcile the financial information pertaining to grants receivable to ensure clerical accuracy. Auditee Response: At each year-end the Board will schedule a review with the bookkeeper to reconcile financial information pertaining to grants receivable to ensure clerical accuracy.

Condition: Based on the District’s provided records, Construction in Progress and Accounts Payable were recorded at $5,702,360 and $366,092 respectively. When reconciled with pay applications and invoice tracking spreadsheets, both accounts are understated by $498,090. Criteria: Correctly and accurately recording journal entries into the General Ledger. Effect: The District’s Construction in Progress and Accounts Payable accounts do not reconcile with any documentation provided. Cause: Management failed to correctly record the account balance for Construction in Progress and Accounts Payable. Recommendation: We recommend at year-end, the Board and bookkeeper review and reconcile the financial information pertaining to construction in progress and accounts payable to ensure clerical accuracy. Auditee Response: At each year-end the Board will schedule a review with the bookkeeper to reconcile financial information pertaining to construction in progress and accounts payable to ensure accuracy.

Condition: The District failed to correctly record accumulated depreciation and fixed assets in Construction in Progress as they were completed. Criteria: As fixed asset additions in construction in progress are completed and put in use, the fixed asset additions are to be classified according to the type of addition they are. Effect: The District’s net capital assets and net income are overstated and do not accurately reflect their financial position. Cause: Management failed to correctly record and classify assets from Construction in Progress as they were completed. Recommendation: We recommend at year-end, the Board and bookkeeper review and reconcile the completion dates of fixed assets in construction in progress to financial information pertaining to construction in progress to ensure clerical accuracy. Auditee Response: At each year-end the Board will schedule a review with the bookkeeper to reconcile completion dates of fixed assets in construction in progress to financial information pertaining to construction in progress to ensure clerical accuracy.

Condition: The District failed to have its audit completed within nine months after their fiscal year end of June 30, 2021. Criteria: The District is required to file a financial report within a timely manner at the end of each fiscal year, or a portion thereof that started with the District’s assumption of financial responsibility. Effect: The audit was not completed as of March 31, 2022, which is nine months after the fiscal year end of June 30, 2021. Cause: Management failed to have the audit completed within nine months due to lack of communication with the auditor. Recommendation: We recommend the District have its audit completed within nine months of fiscal year end. Auditee Response: The Board of Directors of the District will ensure its audits are completed within nine months of fiscal year end.