KENTUCKY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2023
Section II – Financial Statement Findings (Continued)
2023 – 003 – Debt and Lease Accounting (Continued)
Cause: Debt and lease liabilities were not reconciled timely and accrued interest was not properly calculated.
Repeat Finding: No.
Recommendation: We recommend that roll-forwards be performed for all long-term liabilities, supported by appropriate amortization schedules and other supporting documentation, and the general ledger be updated to reflect correct year-end balances.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
2023 – 004 – Capital Assets
Type of Finding:
Material Weakness in Internal Control over Financial Reporting
Condition: Schedules supporting capital asset balances had errors and were incomplete. As a result, material entries were made to correct capital assets, depreciation expense, and loss on sale of asset.
Criteria or specific requirement: Internal controls are critical to ensure accurate financial reporting. These would include, but not limited to, reconciling statement of net position accounts monthly, a formal process of procedures and internal controls to ensure timely and accurate year-end financial statements and related notes and providing supporting audit documentation that reconciles to the trial balance under audit on a timely basis.
Effect: Capital asset related accounts were materially misstated prior to audit adjustments.
Cause: Capital assets were not reconciled timely which caused for errors in the supporting schedules and the University had not adjusted restricted proceeds and capital asset additions for a major capital project that concluded in fiscal year 2023.
Repeat Finding: No.
Recommendation: We recommend the University review its controls over accounting for capital assets and ensure the year-end roll-forward is appropriately supported.
Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
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