WS 05-25-2010 - Laserfiche WebLink

Home Browse Search

1. Lack of Segregation of Accounting Duties • Auditors' Comment During the year ended December 31, 2009, the City had a linked segregation of accounting duties due to a limited number of office employees. Management and the City Council must remain aware of this situation and should continually monitor the accounting system, including changes that may occur. Response: This is a common condition for city finance departments, especially those of our size (0 employees). We have received this comment in the past since it is and remains a significant deficiency as defined by the American Institute of Certified Public Accountants. We are very aware of this issue and take reasonable precautions while developing, reviewing and implementing our practices and procedures. The Finance Department reviews and makes changes and recommendations as necessary and appropriate relating to internal controls on a regular basis. For this year as well as future years, our annual work plan includes reviewing internal controls. The Finance Department staff is encouraged by bring suggestions regarding internal controls to the attention of their supervisor. The lack of segregation of accounting duties at the Family Service Center and Golf Course have been discussed with appropriate Park & Recreation personnel. In March 2006, the Auditing Standards Board issued Statements of Auditing Standards numbers 104 through 111. These new standards provided guidance conceming the auditor's assessment • of risks of material misstatement in a financial statement. The tradition are now required to evaluate the design of internal controls and determine if those controls are being implemented. Anticipating this new requirement, the Fiunnce Department preparad Flowcharts of our procedures and their internal controls. Various procedures and internal controls were discussed with appropriate personnel of operating departments and divisions. As a result, a number of improvements to our internal controls have been implemented. Comments from our auditors are thoroughly discussed with their merits evaluated. With a staff of only seven in the department, segregation of duties is limited. I do not believe (nor do the auditcrs) that the cosVbenefit analysis justifies adding staff to address this issue. 2. Prior Period Adjustment Auditors Comment A prior period adjustment was necessary m adjust construction in pmgress and capital contributions in the Water and Smrmwater Enterprise Funds for items that should have hien added as capital assets in 2008. We recommend the City continue m monitor project expenditures to ensure all asset additions are captured in the year the expeudimre or expense is incurred and consistent criteria be used to determine what projects will be capitalized. Returns : The adjustment of capital contributions in the Water and Scoutmaster Funds was recorded in 2009. It should have been recorded in 2008, therefore resulting in an adjustment to . Ne prior period. The specific capital contributions in the Water and Stormwater Funds were part of the 2008 Street Reconstruction improvement project.