Lee Enterprises, the media company that owns the St. Louis Post-Dispatch and 76 other newspapers nationwide, concluded its internal controls over financial reporting (ICFR) were not effective for the fiscal year ended Sept. 25, 2022.
The results of an internal review, conducted by Lee management and its board of directors’ audit committee, were included in a Feb. 2 regulatory filing with the Securities and Exchange Commission. Lee disclosed in December it received warning of delisting from Nasdaq after failing to meet certain deadlines for filing its annual 10-K form for 2022.
Despite the material weaknesses uncovered, Lee said it doesn’t expect changes to its reported operating results for the fiscal year ended Sept. 25, 2022.
The company’s investigation found material weaknesses in its financial controls and reporting. Management didn’t maintain appropriate controls over information systems related to user access and the preparation of the company’s consolidated financial statements and financial reporting, according to the filing.
Management also didn’t appropriately validate the completeness and accuracy of data provided by third parties, on which the company relied in preparing its consolidated financial statements, Lee said.
“As a result of these material weaknesses, the company concluded disclosure controls and procedures were not effective … which continues to be the case,” the company said.
Management, with oversight from the board and its audit committee, is remediating the deficiencies by conducting a “complete user access review” of information technology systems related to financial reporting, Lee said. The company will enhance its monitoring of user access and take other steps, it said.
Lee created a project team to undertake this task, it said, and its recently expanded compliance function will lead the effort.
The company has still not filed its 2022 Form 10-K and does not expect to until it resolves another matter related to a 2009 deferred tax asset, it said.
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