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Part If. FINANCIAL STATEMENT FINDINGS SECTION We consider the deficiency presented below to be a material weakness in internal control. Finding 2025-001 — Capital Assets / GASB 34 Financial Statements Criteria: Governmental Accounting Standards Board (“GASB”) standards require that the Village appropriately account for its capital assets and the related accumulated depreciation and depreciation expense, and to prepare full-accrual financial statements in accordance with the requirements of GASB Statement No. 34 — Basic Financial Statements — and Management’s Discussion and Analysis —for State and Local Governments. Condition and Content: We found that the Village does not track its capital assets or record depreciation. Because of this, management of the Village was unable to prepare government-wide financial statements. Cause: The Village has determined that developing and maintaining a schedule of capital assets and tracking and recording depreciation would have only limited benefit to the Village. : Effect or Potential Effect: The Village’s financial statements do not present the financial position, and the changes in financial position, of the Village’s governmental activities fairly in conformity with accounting principles generally accepted in the United States of America. Recommendation: We recommend that the Village consider calculating, tracking, and recording depreciation for all depreciable assets. Management's Response: The Village has limited capital assets. The Office of the Comptroller has specifically determined that GASB 34 is not mandatory for small municipalities as the costs of compliance would outweigh its benefits. Part HL FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No findings noted. 49