Wednesday, March 18, 2009

Auditors Forward Findings In Annual City Audit

   Accountants with the firm entrusted with conducting a required annual audit of the records of the City of Lawrenceburg have returned a report, indicating that nine minor infractions were identified.

   The city again contracted with the Nashville accounting firm of Yeary, Howell and Associates to conduct the annual audit for the 2007-2008 fiscal year, which ended June 30, 2008.

   The findings, as well as recommendations for addressing them, area as follows:

   1. Finding -- Reconciliation of sweep accounts – The city was unable to reconcile amounts recorded in the city general ledger with reconciliations of the various sweep accounts, resulting in a net difference of $32,987. Recommendation – We strongly urge that bank accounts be reconciled on a monthly basis.

   2. Finding – Reconciliation of payroll – Differences were noted in relation to the city’s various non taxable benefit plans. We were unable to determine specifically what individual benefits were included in amounts identified as “cafeteria plan” amounts on the computer-generated report used for payroll tax return preparation…also noted that c4ertain amounts for holiday bonuses may not have been subject to tax.

   3. Finding – Requests for reimbursement under grant agreements were not always prepared and submitted in a timely manner. Recommendation – We strongly urge city management to consider designating a central agency, and or person, that would be responsible for overseeing the financial implications of all grants, from the time the grant is awarded through its close out. This person should also monitor whether the related reimbursement requests are promptly prepared and submitted.

   4. Accounting for post employment benefits other than pensions – The City has recently completed an actuarial study to determine its annual required contribution. Recommendation – If it elects to fund the benefit actuarially, we strongly urge the city to establish a trust fund for the purpose of effecting fiduciary responsibility over the accumulation of these funds.

   5. Budget overages noted in various departments of the General Fund, along with overages in the Drug and Sanitation Funds, with the Sanitation Fund ending the year with a fund deficit of $3,455.

   6. Finding – Certain revenues were being considered as earmarked for specific purposes, these revenues would have otherwise simply been revenue to the General Fund. Recommendation – If there is deemed to be an approved need to reserve certain revenue sources net of applicable expenditures, it should be done so by  closing applicable revenues and expenditures to a specified reserve account rather than to unrestricted fund balance.

   7. Finding – Detail General Fixed Asset records had not been updated since June 30, 2007. Recommendation – We suggest that the city establish procedures for document flow necessary to record the acquisition of capital assets and the disposition of capital assets and the timely recording in the detail capital asset records.

   8. Finding – We noted three exceptions from a random selection of fifteen business tax returns, concerning inaccuracies in the recording of receipts, both for City accounting purposes and purposes of reporting to the state. Recommendation – We suggest management review the situation as to whether it arises as a result of software problems or otherwise.

   9. Finding – We counted cash at various locations in the city. The amount of cash on hand at the Beautification Board included cash amounts for prizes to be awarded at a future event… Recommendation – We suggest that cash funds be maintained at minimum levels both for control and security reasons. It was also noted that requests for reimbursements by Beautification Board personnel were not requested on a timely basis and not properly completed in certain instances. We suggest individuals be instructed as to the proper petty cash reimbursement procedures.

   City officials indicate that the majority of the nine findings have already been addressed and the means to correct the situation put into place.

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