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City of Orono, Minnesota <br />Schedule of Finding and Response <br />For the Year Ended December, 31 2021 <br />Finding Description <br />2021-001 Material Audit Adjustments <br />Condition: During our audit, material adjustments were needed to correct the year-end balances for an <br />interfund loan not on the City’s books and the 2021A G.O bond not being recorded on the books. <br />Criteria: Such adjustments were needed to correct year end balances. Amounts reported in the City’s <br />accounting system need to agree to the underlying supporting documentation. <br />Cause: City staff did not record an interfund loan which took place in a prior year. City staff had not <br />previously recorded the 2021A bond issuance that took place on December 30, 2021 <br />Effect: This indicates that misstatements may occur and not be detected by the City’s system of internal <br />control, which could lead to a material misstatement. <br />Recommendation: We recommend management review the related journal entries, obtain an understanding of why <br />the entries were necessary and modify current procedure to ensure that future corrections are not <br />needed. <br />Management Response: <br /> <br />Management agrees with the finding and understands the reason the adjustments were needed. Procedures over year- <br />end adjustments will be reevaluated to eliminate the need for related audit adjustments in the future. DRAFT <br />6