Audit Findings Continued

The October 12 entry detailed three of the ten Audit Findings (Findings #1, 3 and 4). Because I’ve received so much feedback on that particular post and have responded to many questions on what the remaining findings were, I’ve decided to post that today. As the City continues the budget process, these are important to keep in mind.

Finding #2: Funds are not encumbered against amounts appropriated before goods or services ordered and purchases are made without any certification of availability of funds obtained from the Comptroller.
Recommendation: The encumbrance accounting system required by the Division of Local Government services should be adequately maintained.
Corrective Action: While the City has centralized purchasing system, it is not currently enforced. As stated in the Finding #1, a meeting will be held to train department heads and other responsible parties as to the proper purchasing procedures. Current financial software has provisions for encumbrance off all the purchase orders and ability to certify funds before purchases are made. Procedures will be changed in the Audi & Control Division to ensure that certification of funds are prepared and funds are encumbered on a timely basis. Access to the purchasing module of the financial software will be provided to various departments. Training will be held on the purchasing module. A procedure manual on purchasing and encumbrances will also be developed.
Implementation Date: October 2008

Finding #5: A detailed analysis of outside liens redeemed was not maintained.
Recommendation: Detailed analysis of outside liens redeemed should be maintained.
Correction Action: An outside consultant was hired to assist the Tax Department in addressing all redemption issues. The Tax Collector will analyze all information from the Tax Sale and subsequent redemptions and prepare an outside liens redeemed schedule. This schedule will be reconciled with the Audit & Control Division. Future reconciliations will be done on a monthly basis through bill lists and other means.
Implementation Date: October 2008

Finding #6: A detailed list of tax sale premiums collected was not maintained.
Recommendation: Detailed list of tax sale premiums collected should be maintained.
Corrective Action: The Tax Collector will analyze all information from the Tax Sale and subsequent redemptions and prepare a tax sale premiums schedule. This schedule will be reconciled with the Audit & Control Division. Future reconciliations will be done on a monthly basis through bill lists and other means.
Implementation Date: October 2008

Finding #7: Cancellation of tax overpayments were recorded as an increases to the levy instead of being shown as a reduction of liability.
Recommendation: Cancellation of tax overpayment be recorded on the tax computer system as a reduction of liability.
Corrective Action: Tax Collector procedures will be reviewed. Additional instructions and training may be necessary for all employees. Tax Overpayments will be reconciled monthly through monthly report, bill lists and other means.
Implementation Date: November 2008

Finding #8: A detailed analysis of federal and state grants receivable is not maintained.
Recommendation: Detailed analysis of federal and state grants receivable should be maintained.
Corrective Action: State grants receivable ledger will be computerized for SFY 2009. The Grants coordinator will be responsible for maintenance of this schedule.
Implementation Date: July 2008

Finding #9: The City has numerous inactive account balances in the sewer utility fund.
Recommendation: All inactive account balances should be reviewed for cancellation.
Corrective Action: All accounts in sewer utility fund will be reviewed during SFY 2009 budget preparation and provisions will be made for account balance cancellations. A resolution will be submitted to the City Council for the approval of cancellations.
Implementation Date: (This was left blank on the form I have)

Finding #10: An item “Deferred Charges - Cancelled receivable” which has remained unchanged for many years in the general capital fund should be reviewed.
Recommendation: The balance for Deferred Charges - Cancelled Receivables should be provided for.
Corrective Action: A balance for Deferred Charges - Cancelled Receivables will be reviewed during SFY 2009 budget preparation. Provisions will be made for account balance cancellations.
Implementation Date: September 2008

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