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<br />CITY OF SAN LEANDRO <br /> <br />ST A TUS OF PRIOR YEAR INTERNAL CONTROL COMMENTS <br />JUNE 30, 2006 <br /> <br />DEPRECIA TION EXPENSE CALCULA nONS <br /> <br />Comment <br /> <br />Accounting principles generally accepted in the United States of America require that depreciation be calculated <br />based on the estimated useful life of all depreciable capital assets. Our audit revealed that there was <br />approximately $8,000 in depreciation expense on Redevelopment Agency capital assets that was not recorded for <br />the current fiscal year. We also observed that this was the second year that no depreciation was calculated or <br />recorded for Land Improvements for the City. Although the umecorded amounts are immaterial to the financials <br />on the whole, if this omission continues, the compound impact would be material. <br /> <br />Recommendation <br /> <br />We recommend that depreciation be taken on all assets as required by current accounting principles generally <br />accepted in the United States of America. <br /> <br />Status <br /> <br />Implemented <br /> <br />4 <br />