A Follow-up Audit Report on the Kinney County Groundwater Conservation District Page: 9 of 51
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June 30, 2009, the District's financial records still listed Other Current Assets
of $167,863. When auditors asked for an explanation of what these assets
were, the District stated that it could not find an explanation in any of its
records for how these assets were created or why these funds were classified
as current assets. Because District management cannot substantiate the
existence of the original transactions that made up the $167,863, the District
should determine whether its financial records should be corrected.
The District also lacked adequate supporting documentation for its recorded
escrow amounts. Escrow accounts are established to retain deposits for
application fees and other administrative costs. Auditors were unable to
determine whether the escrow accounts contain only funds that relate to the
permit applicants because of the lack of supporting documentation.
Additionally, the escrow funds were comingled with operating funds.
Without supporting documentation, the District cannot ensure that the
amounts paid, received, and recorded in its financial records are accurate.
Recommendations
The District should:
- Ensure that audits of financial statements are conducted in a timely
manner.
- Record any adjusting entries in the District's financial records in a timely
manner.
- Ensure that financial transactions are accurately and properly recorded in
its financial records.
- Maintain supporting documentation for all financial transactions.
Management's Response
The District will:
- Complete the current audits for Fiscal years 2007 and 2008.
- Complete an audit for the recently ended Fiscal year 2009.
- Correct any entries that require adjustment based on the outcome of the
audit. The District Treasurer has already made a number of corrections
based on the recommendations of the State Auditor.
- Contract with an accounting firm to provide bookkeeping services until
professional staff can be hired to perform that task, after which the
A Follow-up Audit Report on the Kinney County Groundwater Conservation District
SAO Report No. 10-023
February 2010
Page 4
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Texas. Office of the State Auditor. A Follow-up Audit Report on the Kinney County Groundwater Conservation District, report, February 2010; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth517437/m1/9/?rotate=90: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.