Orange County NC Website
Browse       Search
17 <br /> ORANGE COUNTY, NORTH CAROLINA <br /> SCHEDULE OF FINDINGS AND QUESTIONED COSTS <br /> FOR THE YEAR ENDED JUNE 30,2015 <br /> 2. Findings Related to the Audit of the Basic Financial Statements <br /> Finding 2015-001: Material Adjusting Journal Entries <br /> Criteria: Management should have a system in place to reduce the likelihood of errors in financial <br /> reporting. <br /> Condition: A significant audit adjustment is a proposed correction of the basic financial <br /> statements that, in our judgment, may not have been detected except through our auditing <br /> procedures. The existence of such material adjustments indicated that the County's system of <br /> controls did not detect and prevent such errors. We have provided management with a report of <br /> these adjustments. <br /> Context: The County did not accurately record their debt refunding entries. <br /> Effect: Financial reports used for budget monitoring throughout the year do not properly reflect the <br /> account balances. <br /> Recommendation: Management should examine the adjustments required as a result of our audit <br /> and assess the cost/benefit of improving the internal control system to prevent the adjustments in <br /> the future,given the County's available resources. <br /> Name of Contact Person: Gary Donaldson, Chief Finance Officer <br /> Corrective Action: Management will examine controls in place to see if they can be strengthened <br /> and given available resources. In the areas where the cost/benefit does not justify improving the <br /> control system,management will exercise due caution in performing its oversight function. <br /> Finding 2015-002: Prior Period Adjustment <br /> Criteria: Management should have a system in place to reduce the likelihood of errors in financial <br /> reporting. <br /> Condition: A prior period adjustment is required to correct material errors that occurred in periods <br /> prior to the current fiscal year under audit. The necessity of a prior period adjustment indicates that <br /> the County's system of controls did not detect and prevent a material error in financial reporting. <br /> Context: The County discovered an error in how the OPEB liability was reported. <br /> Effect: The County was understating their OPEB liability. <br /> Cause: Contributions were not being made to an irrevocable trust and should not have been used to <br /> reduce the liability. <br />