• by Ray Schultz , February 6, 2023

Publisher Lee Enterprises has discovered “material weaknesses” in its financial reporting and has not yet filed its annual report for the fiscal year ended September 25, 2022, the company states in a Form 8-K filing with the Securities and Exchange Commission.

Management “did not maintain appropriately designed information technology general controls in the areas of user access for certain of its information systems that are relevant to the preparation of the Company's consolidated financial statements and system of internal control over financial reporting,” Lee says. 

In addition, management “did not maintain appropriately designed controls over data provided by third-party service organizations for which a System and Organization Controls (SOC) 1 Type 2 report is not available.” 

This had to do with “controls related to deficiencies validating the completeness and accuracy of information received from these service organizations.”

The company’s controls “were not effective as of September 25, 2022, which continues to be the case,” it states. 

Remediation will consist of the following measures; 

• Establish a project team to review, evaluate, and remediate material weaknesses in internal controls over financial reporting. 
• Undergo “a complete user access review related to our information technology systems to refine user roles and establish appropriate user access to various systems that the Company relies upon in its internal controls over financial reporting.”

Finally, the company says it needs  additional time in order to file its annual report on Form 10-K to “complete an evaluation of the accounting for an acquisition-related deferred tax asset that stemmed from a transaction in 2009, and whether this deferred tax asset still has the current balance sheet carrying value or should be written down.”