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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 07/21/2017
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The Company did not have an effective annual process in place to ensure that all employees, including management, and outsourced service providers confirmed their compliance with the Company's Code of Business Conduct and that deviations from the expected standards of conduct were identified and remedied in a timely manner. Further, the Company did not maintain an effective whistleblower hotline throughout the organization;
The Company did not have effective Board oversight and management monitoring activities over financial reporting processes and internal controls;
The Company did not have a sufficient number of trained resources with assigned responsibility and accountability for financial reporting processes and the effective design and operation of internal controls;
The Company did not have an effective, documented and continuous risk assessment process to identify and analyze risks of financial misstatement due to error and/or fraud and to identify and assess necessary changes in generally accepted accounting principles and financial reporting processes and internal controls impacted by changes in the business model resulting from growth from acquisitions, changes in information systems, changes at SunEdison and transition of key personnel;
The Company did not have effective information and communication processes that ensured appropriate and accurate information was available to financial reporting personnel on a timely basis in order that they could fulfill their roles and responsibilities.

Accordingly, the Company and SunEdison, as our service provider for all matters related to financial reporting processes and controls, did not establish appropriate control activities through policies and procedures to mitigate risks to the achievement of the Company's financial reporting objectives, as follows:

The Company did not have effective information technology (IT) general controls over all operating systems, databases, and IT applications supporting financial reporting. Accordingly, process-level automated controls and manual controls that were dependent upon the information derived from IT systems were also determined to be ineffective. Additionally, the Company did not have effective end-user computing controls over spreadsheets used in financial reporting.
The Company did not have effective controls over the completeness, existence, and accuracy of revenues and the completeness, existence, accuracy and valuation of accounts receivable.
The Company did not have effective reconciliation controls over the completeness, existence and accuracy of certain balance sheet accounts. Specifically, the reconciliation controls did not adequately investigate, resolve and correct reconciling items on a timely basis.
The Company did not have effective controls over the completeness, existence and accuracy of expenses and accounts payable and accrued expenses. Specifically, the Company did not establish an effective accounts payable voucher and disbursement process and related internal controls in order to review and approve and accurately record accounts payable and accrued liabilities on a timely basis.
The Company did not have effective controls over the completeness, existence and accuracy of renewable energy facilities, accumulated depreciation and depreciation expense.
The Company did not have effective controls over the completeness, accuracy and presentation of restricted cash. Specifically, there were ineffective controls over the completeness and accuracy of information and ineffective controls over program changes and access to the spreadsheets used to measure the restricted cash transactions.
The Company did not have effective process-level and management review controls over the completeness and accuracy of information used in the measurement and disclosure of goodwill impairment, long-lived asset impairment and asset retirement obligation assessments, fair value measurements of underlying assets acquired and liabilities assumed in business combinations, allocation of income between controlling and non-controlling interest using the hypothetical liquidation of book value method, and debt covenant compliance and going concern evaluation processes.

These control deficiencies resulted in several material misstatements to the preliminary consolidated financial statements that were corrected prior to the issuance of the audited consolidated financial statements. These control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis, and therefore we concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, 2016.

Our independent registered public accounting firm, KPMG, LLP, who audited the consolidated financial statements included in this annual report, has expressed an adverse report on the operating effectiveness of the Company's internal control over financial reporting. KPMG LLP's report appears on page 136 of this annual report on Form 10-K.



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