Many residents mistakenly believe that the District’s financial transactions and reporting are “top notch” because year-after-year we receive “clean audits.”¹ However, by abdicating to our staff (the very people being audited), its responsibility to provide independent “assurance” that the District’s financial statements are free of fraud or error, and that they’re compliant with all applicable laws and regulations, we contend our auditor’s final product lacks credibility.

We’ve elsewhere discussed: a) what an audit of a Nevada local government’s financial statements is supposed to consist of; b) the different types of audit a local government can commission in compliance with NRS requirements; and, c) the type of audit IVGID regularly commissions. Therefore here we examine: whether the District’s audits actually comply with the NRS², and if so, whether they serve a beneficial purpose? Or do they simply represent “lip service” intended to literally comply with those pesky NRS requirements which mandate annual audits be conducted³ and filed with the Nevada Department of Taxation⁴ (“NDOT”)?

The Purposes of Our Audits: To refresh the reader’s recollection, our current auditor, DavisFarr, LLP, tells us that for each fiscal year⁵ the District “request(s it)…audit (the District’s) governmental activities…business-type activities, each major fund, and the aggregate remaining fund information.”⁶ “The objectives of (that) audit are (purportedly) to obtain reasonable assurance about whether the (District’s) financial statements as a whole are free from material misstatement, whether due to fraud or error, and, (to) issue an auditor’s report that includes (DavisFarr’s) opinion”⁷ to said effect.

What Type of Audit Does The District Commission? Again to refresh the reader’s recollection, we believe that at the urging of its auditor(s), the audit the District commissions consists of “ascertaining whether the financial statements prepared from the accounting records fairly present in all material respects the financial position and the results of financial operations and cash flows of the governmental unit in accordance with Generally Accepted Accounting Principles in the United States (‘GAAP’), and on a basis which is consistent with that of the preceding year.”⁶ In other words, confirming that expenditures match up to invoicing.

But is This The Most Prudent Type of Audit For The District to Commission? Stated differently, is there a more revealing type of audit for the District to commission? After all, only “by understanding the different types of audits available, can (one) ensure that…(the District) conducts the most effective services to meet…(its) needs and goals.”⁸ Here many in our community believe we don’t require an audit which simply confirms that payments correspond to invoicing. It’s a waste! Rather, they believe we require an audit: “which determin(es) whether: there is…evidence that fraud or dishonesty has occurred in the handling of funds or property⁹; (and,)…the acquisition, depreciation and disposition of property and equipment are (truly) accounted for in accordance with” GAAP¹⁰.

Nevertheless, The Opinion Letters The District Typically Receives From Its Auditors: Given NRS 354.624(4) instructs that an audit requires “an expression of opinion (insofar as a local government’s)…financial statements” are concerned, let’s examine our auditor’s “Report and Opinion Letter” for 2022¹¹. There DavisFarr told the Board and the public that: a) “the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund…the aggregate remaining fund information of the District, as of June 30…the respective changes in financial position and, where applicable, cash flows…for the year then ended in accordance with” GAAP; and, that b) the District’s financial statements “are (allegedly) free from material misstatement whether due to fraud or error.” Because of the numerous disclaimers outlined below, nothing more than confirming that expenditures match up to invoicing.

Our Critics Counter That Our Concerns Are Unwarranted Inasmuch as We’ve Always Received a “Clean“ Audit¹: Staff and the Board will never follow through with the more revealing type of audit we champion because they fear the consequences. After all, they claim we’ve already received a “clean audit” from DavisFarr. But although our auditor tells us it has achieved its objectives⁶, has it really? By skillfully diverting its alleged “assurance” of rooting out fraud, error and ensuring compliance with all applicable laws and regulations onto staff (the very people being audited¹²), how can our auditor’s final product be credible? How can its independent objectives have been achieved when the assurances it represents have been verified by others? Or not verified at all?

Our Auditor’s Disclaimer After Disclaimer: Consider the fourteen (14) disclaimers below DavisFarr has forced the District to agree to as a pre-condition of being our auditor¹³. In our opinion these disclaimers render DavisFarr’s end product untrustworthy at best, and nothing more than another propaganda tool at worst. Intended to be used by IVGID staff to make we lay residents think the District has obtained a “clean audit.”

Disclaimer No. 1 – Responsibility For Management: DavisFarr tells us it “will not assume management responsibilities on behalf of the” District¹⁴. So we guess that responsibility falls on IVGID staff. Including responsibility for ensuring our financial statements are free from material misstatement, and rooting out fraud or error.

Disclaimer No. 2 – Responsibility For Preparing Budgetary Comparison Schedules: DavisFarr tells us that although “budgetary comparison schedules are presented (in our ACFRs) for purposes of additional analysis…(their preparation is) the responsibility of management (rather than our auditor)…(And as such, they are) not a required part of the basic financial statements.” So for this reason, those schedules are not included in DavisFarr’s report¹⁵. Again, that responsibility falls on IVGID staff.

Disclaimer No. 3 – Responsibility For Preparing Required Supplementary Information: DavisFarr tells us that although “certain required supplementary information (‘RSI’) such as management’s discussion and analysis (must) be presented to supplement the basic financial statements…(it is) not a part of the (District’s) basic financial statements.”¹⁶ Notwithstanding, it “is required by the Governmental Accounting Standards Board¹⁷, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.”¹⁸ For this reason, DavisFarr, as well as former District auditors¹⁸, “express…no…opinion (n)or provide any form of assurance on the RSI¹⁹…because the limited procedures do not provide (them) with sufficient evidence to express an opinion. And again, that responsibility falls on IVGID staff.

Disclaimer No. 4 – Responsibility For Preparing Required Other Information: DavisFarr tells us that although “other information (such as)…introductory…individual fund schedules including budgetary comparisons²⁰, and statistical section(s are) included in the” ACFR, since they “are not a required part of the financial statements…have not been subjected to the auditing procedures applied in the audit of the basic financial statements…are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements,”²⁰ it “do(es) not express an opinion or any form of assurance thereon.”²¹ And again, that responsibility falls on IVGID staff.

Disclaimer No. 5 – Responsibility For The Preparation of Defined Contribution Multi-Employer Plans, And Budgetary Comparisons: DavisFarr tells us that GAAP “require(s) that the management’s discussion and analysis, schedule of employer required contributions to defined contribution multi-employer plans, and budgetary comparison information (must) be presented (in an ACFR) to supplement the basic financial statements. (But again, DavisFarr tells us that) such information is the responsibility of management…(and it) do(es) not express an opinion (n)or provide any assurance on the information.”²⁰ So again, that responsibility falls on IVGID staff.

Disclaimer No. 6 – Responsibility “For The Preparation And Fair Presentation of The Basic Financial Statements in Accordance With GAAP:” Because DavisFarr tells us it has required District management to acknowledge in writing that the auditor is expressly not responsible for these statements²², again, that responsibility falls on IVGID staff.

Disclaimer No. 7 – Responsibility For Gathering “All Information of Which (District) Management is Aware Relevant to The Preparation And Fair Presentation of The Basic Financial Statements: such as records, documentation, and other matters, including the (the District’s) Policies, Practices and Procedures related to financial reporting.” Because DavisFarr tells us it has required District management to acknowledge in writing that the auditor is expressly not responsible for the gathering of this information²³, again, that responsibility falls on IVGID staff.

Disclaimer No. 8 – Responsibility “For Identifying And Ensuring That The (District Has) Complie(d) With (All) Laws And Regulations Applicable to Its Activities: including the (District’s) Policies, Practices and Procedures related to financial reporting.” Because DavisFarr tells us it has required District management to acknowledge in writing that the auditor is expressly not responsible for this compliance²², again, that responsibility falls on IVGID staff.

Disclaimer No. 9 – Responsibility “For Adjusting The (District’s) Basic Financial Statements: to correct material misstatements and confirming to (DavisFarr) in the management representation letter²⁴ that the effects of any uncorrected misstatements…are immaterial, both individually and in the aggregate, to the basic financial statements as a whole.” Because DavisFarr tells us it has required District management to acknowledge in writing that the auditor is expressly not responsible for this adjusting²², again that responsibility falls on IVGID staff.

Disclaimer No. 10 – Responsibility For Internal Controls: DavisFarr tells us that although it “considered IVGID’s internal control over financial reporting (‘internal control’) as a basis for designing audit procedures, that…consideration…was…not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control²⁵. Accordingly, (it did)…not express an opinion on the effectiveness of IVGID’s internal control over financial reporting…(nor did it) identify all deficiencies in internal control that might be significant deficiencies or material weaknesses(. For this reason, significant deficiencies or material weaknesses may exist that have not been identified…(even though it) identified…deficiencies in internal control (it)…consider(ed)…significant.”²⁶ In other words again, that responsibility falls on IVGID staff.

Disclaimer No. 11 – Responsibility “For The Design, Implementation, And Maintenance of Internal Control(s):” DavisFarr tells us that the design, implementation and maintenance of internal controls relevant to the preparation and fair presentation of basic financial statements that are free from material misstatement, whether due to error, fraudulent financial reporting, misappropriation of assets, or violations of laws, governmental regulations, grant agreements, or contractual agreements falls on IVGID staff. And for this reason, DavisFarr tells us it has required District management to acknowledge in writing that the auditor is expressly not responsible for any aspect of these controls²². In other words again, that responsibility falls on IVGID staff.

Disclaimer No. 12 – Responsibility “For The Accuracy And Completeness of All Information Provided.” DavisFarr tells us it has required District management to acknowledge in writing that it is the District which is responsible for providing DavisFarr with such information¹⁴. So ultimately, again, that responsibility falls on IVGID staff.

Disclaimer No. 13 – Responsibility For Compliance With Applicable Laws, Regulations, Contracts And Agreements: DavisFarr tells us that although “part of obtaining reasonable assurance about whether the basic financial statements are free of material misstatement, (and it) will perform tests of the (District’s) compliance with the provisions of applicable laws, regulations, contracts, and agreements…(since) the objective of (its) audit will not be to provide an opinion on overall compliance…(it) will not express such an opinion.”⁶ So again, that responsibility falls on IVGID staff.

As part of obtaining reasonable assurance about whether Incline Village General Improvement District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Disclaimer No. 14 – Responsibility “For Informing (DavisFarr) of Any Known or Suspected Fraud: affecting the (District) involving management, employees with significant role in internal control and others where fraud could have a material effect on the financials.” Because DavisFarr tells us it has required District management to acknowledge in writing that it is the District which is responsible for informing DavisFarr of the same¹⁴, again, that responsibility falls on IVGID staff.

If The Above Weren’t Enough, DavisFarr Admits Additional Undetected Material Misstatements May Unavoidably Still Exist: “because of the inherent limitations of an audit, together with the inherent limitations of internal control…even though the audit is properly planned and performed in accordance with GAAS and…Government Auditing Standards.”²¹ Really?

As a Result of The Above Disclaimers, in Our Opinion DavisFarr’s “Clean“ Opinions¹ Are a Joke! In fact, they make us question what type of responsible public agency would ever contract for such a meaningless service like this?

But Wait! There’s More: Are you kidding us? More? Really?

Material Deficiencies in Internal Controls Identified: Starting in 2021²⁷ and continuing in 2022²⁸, the District’s auditor began calling out a series of material weaknesses²⁹ as deficiencies in internal control³⁰. Although we’re not going to highlight each and every deficiency, we observe that ultimately, staff’s general response was it would continue to review the recommendations. However, they were generally not “cost effective” and for this reason, not implemented. Notwithstanding, our auditor refused to alter its opinion because the significant deficiencies and material weaknesses identified in its audits were not subject to the audit procedures applied in the audit of the financial statements³¹, and disingenuously proclaimed that “the results of (thei)r tests disclosed no instances of noncompliance or other matters,,,required to be reported under Government Auditing Standards.”³²

The “So Called” Audit DavisFarr Performed For 2023: The folly of the District’s financial reporting came to a head in 2023. When DavisFarr delivered an opinion letter² which stated that because of District staff³³, our auditor couldn’t deliver an audit. In other words, all it could deliver was a Disclaimer Report³⁴. Let us explain.

As we’ve elsewhere explained, a local government’s audited financial statements must be filed with the NDOT not later than 5 months after the close of the fiscal year for which the audit is conducted. So for local governments like IVGID, whose fiscal years end on June 30, the deadline date for the filing of their audited financial statements is December 31 of each year. Yet at the District’s Board’s March 28, 2024 meeting³⁵, staff revealed the District was operating under its third extension for 2023³⁶, and its failure to comply with the contingencies of previous extensions could lead to adverse action. So there was an urgency to produce “a report” as opposed to the type of report mandated by the NRS.

Notwithstanding NRS 354.624(4) instructs that “each annual audit must…includ(e)…an expression of opinion on the (District’s) financial statements,”² DavisFarr refused to “express (such) an opinion…(because it was) not…able to obtain sufficient appropriate audit evidence (from management³⁷) to provide a basis for an audit opinion.”³⁸ In other words, the District failed to prepare and submit NRS audited financial statements for 2023! And in lieu, its auditor prepared and submitted a Disclaimer Report³⁷. And this was and is supposed to be acceptable? And the public is supposed to be assured that the District’s basic financial statements are free of material misstatement, and in compliance with the provisions of applicable laws, regulations, contracts, and agreements in accordance with GAAP?

So what was it our professional staff recommended the Board do? Unbelievably, “Receive, Review, Discuss and File Receipt of the…District’s (UN)Audited Financial Statements, Auditor’s Verbal Report, and Report on Internal Control for the Fiscal Year Ended June 30, 2023 as Presented.”³⁸ And what was the former chairperson of our Audit Committee, Chris Nolet’s, response?

“With regard to the notion that we have audited financial statements for the year ended June 30th, 2023(, although) we do have a signed report from our auditors…the report is a disclaimer opinion….(which) means (our) financial statements are not audited. (DavisFarr’s) disclaimer opinion says ‘we do not express an opinion on the (District’s) financial statements because of all these reasons.’ I’m just not sure what part of ‘we do not express an opinion’ we don’t understand…I’ll just tell you what dictionary.com says about a disclaimer: you are renouncing, repudiating, denying and disallowing…So, we do not have audited financial statements. This is not a matter of nomenclature or semantics. I just don’t understand how there can be any confusion on this…I’m just at a complete loss as (to) why we still keep calling these (statements) ‘audited’…(Notwithstanding) it has a lot of important ramifications…I don’t think calling these financial things ‘audited’ is…going to end well. Perpetuating a categorically incorrect narrative, (that our) financial statements (are) audited, will come to an end at some point.”³⁹

The District’s April 3, 2024 Press Release: You’re now going to see how the District is nothing more than a propaganda machine! What general improvement district (“GID”) in the State employs a “communications coordinator?” Whose job is to spew his/her employer’s propaganda? That’s right. IVGID! Our propagandist’s name is Kari Ferguson. And according to Transparent Nevada, Ms. Ferguson was paid a whopping $119,836.68 in salary and benefits in 2022. To publish untruths such as these. And since the Transparent Nevada site is being updated, in mid-2024 we’re certain Ms. Ferguson’s then salary and benefits will exceed $140,000!

Regardless, on April 3, 2024 Ms. Ferguson created and sent out a press release⁴⁰ concerning our “so called” audited financial statements for 2023. And “for immediate release” no less. That release read as follows: “At its regularly scheduled meeting today, the (NDOT), Committee on Local Government Finance (CLGF), accepted the IVGID Annual Comprehensive Financial Report (for 2022-23). The CLGF acknowledged IVGID…is in full compliance with th(os)e extensions granted by NDOT establishing the State filing deadline.”

Now who sends out a press release which announces a public agency has complied with the law? Let alone belatedly. Who implies to the public that the District has fulfilled its NRS requirements by filing audited financial statements when as we’ve demonstrated, for 2023, it hasn’t? And why would a public agency do something like this? Why wouldn’t it keep its proverbial mouth shut? So as not to direct attention onto itself?

NRS 354.626(1): makes it a crime for “any officer or employee of a local government (to)…willfully violate…NRS 354.470 to 354.626, inclusive.” Has there not been a violation of NRS 354.624(4)? Does not this NRS sit somewhere between NRS 354.470 to 354.626, inclusive? Has the District willfully failed to file audited financial statements for 2023 with the NDOT? Doesn’t sending out a press lease and applying for a GFOA Certificate of Excellence (see below) point to arrogance and willfulness? And is this supposed to be acceptable?

The District’s Loss of The Government Finance Officers‘ Association‘s (“GFOA’s”) Prestigious “Certificate of Achievement For Excellence in Financial Reporting:” If the District’s 2023 financial statement debacle described above were an isolated incident, perhaps we could turn the other cheek and allow our auditor to quietly issue an opinion that the District’s financial statements as a whole for 2023 were free from material misstatement. But to demonstrate staff’s financial fall from grace so to speak, the District will not garner the GFOA’s aforesaid Certificate of Excellence. Because District staff didn’t even apply!

So the reader can understand the full import of this loss of certification, he/she must understand the ramifications of this Certificate of Excellence. Let’s first identify the GFOA. Basically it’s a trade and lobby group comprised of governmental and other finance professionals throughout the United States and Canada⁴¹ whose career, studies or interests involve government financial management. The organization touts that it provides timely information, practical educational opportunities, high-quality professional publications, and the latest information on best practices⁴². It claims it exists, in part, to “offer…a number of award programs (to members) that (allegedly) recognize excellence in government finance.”⁴³ And here its “Award for Excellence in Government Finance (allegedly) recognize(s)…exceptionally well implemented GFOA best practice…contributions to the practice of government finance that exemplify outstanding financial management. The award…stress(es) practical, documented work that offers leadership to the profession and promotes improved public finance.”⁴⁴ Although according to the GFOA literally “thousands of your peers (have) become…participant(s)…in GFOA(‘s) awards programs”⁴⁵, for 2023 IVGID and its chief financial officer won’t be two of them.

The District’s Application For The GFOA’s “Certificate of Achievement For Excellence in Financial Reporting“ For Its 2023 ACFR: For more than the last two (2) decades the District has applied for, and been awarded this prestigious Certificate. One need only go to the District’s “Annual Comprehensive Financial Report” web page and thumb through the various ACFRs the District has filed. At the beginning of each, one will find the previous fiscal year’s prestigious award. So knowing that the District’s financial statements did not earn a “clean” audit from DavisFarr for 2023, we were curious as to whether staff would be so arrogant as to make another application to the GFOA for one of these Certificates. And can you believe?

Conclusion: So now that you know the entire story, DavisFarr’s disclaimer after disclaimer, its “identifi(cation of material)…deficiencies in internal control⁴⁶ (it)…consider(ed) to be significant for 2022⁴⁷, and its disclaimer report for 2023³⁷, do you really take solace in its opinion (at least for the fiscal year ended June 30, 2022) that the District’s “financial statements as a whole are free from material misstatement, whether due to fraud or error?”⁶ And that those “financial statements present fairly, in all material respects, the respective financial position of the governmental…business-type activities, each major fund…aggregate remaining fund information…the respective changes in financial position and, where applicable, cash flows thereof?”⁴⁸ Don’t you see that according to DavisFarr and staff, the District really doesn’t need an audit? All it requires is the opinion of IVGID staff! Which explains why we are of the opinion the District’s audits do not comply with the NRS, nor do they provide reasonable assurance that the District’s financial statements are free from material misstatement whether due to fraud or error, nor that they serve a beneficial purpose other than as propaganda.

And now you know.

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1. “A ‘clean report’ expresses an auditor’s ‘unqualified opinion,’ which means the auditor did not find any issues with a company’s (or in this case public agency’s) financial records. (In this instance) ‘unqualified’ expresses that the (public agency) does not need to meet any additional qualifications to improve its financial status. A company (or public agency) receives a ‘clean’ report when it shows it follows th(os)e standards set by (generally accepted accounting principles)…GAAP. This is the most desired and common type of audit report (where)…an auditor expresses (his/her/its) belief that (his/her/its client)…has…good financial standing and complies with the laws and governing principles of accounting” (go to https://www.indeed.com/career-advice/career-development/audit-report-types).
2. See NRS 354.624(4) which instructs “each annual audit must cover the business of the local government during the full fiscal year(, and it)…must be a financial audit conducted in accordance with generally accepted auditing standards (‘GAAS’) in the United States, including findings on compliance with statutes and regulations and an expression of opinion on the financial statements.”
3. See NRS 354.624(1) which mandates every “local government…provide for an annual audit of all of its financial statements.”
4. See NRS 354.624(6)(c) which mandates that “the opinion and findings of the auditor contained in the report of (its) audit must be…filed as a public record with…the Department of Taxation.”
5. Here we specifically point to the fiscal year ending “as of June 30, 2022.”
6. See page 007 of the packet of materials prepared by staff in anticipation of the Audit Committee’s May 10, 2022 meeting (“the 5/10/2022 Audit Committee packet“) as well as page 5 of the packet of supplemental materials prepared by staff in anticipation of the Board’s March 28, 2024 meeting (“the 3/28/2024 Supplemental Board packet“).
7. See page 007 of the 5/10/2022 Audit Committee packet.
8. See https://www.eidebailly.com/insights/articles/2019/3/forensic-audit-vs-internal-audit.
9. See NRS 354.486(6). In other words, a forensic audit. “An examination of financial records to find any illegal financial activity.” Because forensic audits are helpful where as here: “suspicions of fraud or theft (have) arise(n); (employee) turnover has occurred and account balances are not what they should be…accounts that were thought to be in…our entity’s name are not really owned by…our entity; reconciliation procedures (have) result(ed) in timing differences or unidentified differences, or they don’t reconcile at all; vendors that should have been paid have not been paid, and/or customers that should have paid have not; theft of personally identifiable information has occurred or business systems have been hacked; (or,) labor and materials have resulted in poor quality products that are not selling (or worse, are out of compliance with laws and regulations).”
10. See NRS 354.486(7).
11. See pages 7 and 83 of the 2022 Annual Comprehensive Financial Report (“ACFR”).
12. Or, the equivalent of designating the wolf as the one to guard our chicken coop.
13. Can you believe fourteen (14)?
14. See page 010 of the 5/10/2022 Audit Committee packet.
15. See page 9 of the 2022 ACFR and page 008 of the 5/10/2022 Audit Committee packet.
16. See page 8 of the 2022 ACFR.
17. “The Governmental Accounting Standards Board (or ‘GASB’) is the independent, private-sector organization…that establishes accounting and financial reporting standards for U.S. state and local governments (like Nevada) that follow…(GAAP)” [see https://gasb.org/about].
18. See page 8 of the 2020 ACFR.
19. See page 9 of the 2022 ACFR.
20. See pages 8-9 of the 2022 ACFR.
21. See page 008 of the 5/10/2022 Audit Committee packet.
22. See pages 7-8 of the 2022 ACFR.
23. See page 009 of the 5/10/2022 Audit Committee packet.
24. See NRS 354.624(5) which requires “each local government (to) provide to its auditor: (a) A statement indicating whether each of the following funds…(1) An enterprise fund, (2) An internal service fund, (3) A fiduciary fund, (4) A self-insurance fund, or (5) A fund whose balance is required by law to be: (I) used only for a specific purpose other than the payment of compensation to a bargaining unit, as defined in NRS 288.134; or, (II) carried forward to the succeeding fiscal year in any designated amount, is being used expressly for the purposes for which it was created…and, (b) A list and description of any property conveyed to a nonprofit organization pursuant to NRS 244.287 or 268.058.
25. See page 7 of the 2020 ACFR.
26. See pages 9 and 83 of the 2022 ACFR.
27. See pages 84-88 of the 2021 ACFR.
28. See pages 83-85 of the 2022 ACFR.
29. “A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis” (see page 84 of the 2021 ACFR).
30. “A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis” (see page 84 the 2021 ACFR).
31. See page 90 of the 2021 ACFR, and page 85 of the 2022 ACFR.
32. See page 89 the 2021 ACFR.
33. “That the District had not completed a bank reconciliation on its main operating account until October 12, 2022. Timely preparation of bank reconciliations allows for the prompt detection of errors in the accounting records and safeguarding of IVGID assets from misappropriation.”
34. “Auditors issue disclaimer reports when they have excused themselves from providing an opinion about a (client’s) financials. When an auditor issues this report, it often means they felt the (client) prevented them from making proper observations. This may happen if a (client) does not give satisfactory answers to an auditor’s questions, or if there is a mistake in (it’s) financial records. If this happens…auditor(s) may feel they cannot make a definite decision about a (client’s) financials. (Thus) a disclaimer report allows them to distance themselves from a (client) if necessary and (to) maintain their reputation as a fair and professional auditor(s)” (go to https://www.indeed.com/career-advice/career-development/audit-report-types).
35. See page 4 of the packet of materials provided by staff in anticipation of the Board’s March 28, 2024 meeting (“the 3/28/2024 Board packet“).
36. NRS 354.624(1) provides that “an extension of this time may be granted by the (NDOT) to any local government that submits an application for an extension.”
37. See “The Bas(e)s For Disclaimer of (DavisFarr’s) Opinion: The introduction of a new accounting system in July 2022 and significant turnover of District finance staff resulted in numerous misstatements in the accounting records. As of the date of (it’s) audit report, management was still in the process of identifying and correcting system deficiencies. (DavisFarr was) unable to complete (its) analytical review procedures of revenues and expenses, (it) w(as) unable to obtain sufficient audit evidence supporting other amounts in the financial statements, and (it) w(as) unable to evaluate the results of (an) ongoing forensic due diligence investigation to determine if any additional audit procedures (we)re necessary. As a result of these matters, (it) w(as) unable to determine whether any adjustments might have been found necessary in the accompanying financial statements.”
38. See page 6 of the 2023 ACFR.
39. See page 84 of the packet of materials prepared by staff in anticipation of the Board’s April 24, 2024 meeting (“the 4/24/2024 Board packet“).
40. That press release sits on the District’s home web page.
41. See https://www.gfoa.org/about.
42. See http://www.gfoa.org/join.
43. See https://www.gfoa.org/awards.
44. See https://www.gfoa.org/award-for-excellence.
45. See https://www.gfoa.org/coa-program-recipients.
46. “A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented (n)or detected and corrected on a timely basis. A reasonable possibility exists when the likelihood of an event occurring is either reasonably possible or probable…A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.”¹⁹
47. See page 83 of the 2022 ACFR.
48. See page 7 of the 2022 ACFR.