INTERNAL CONTROLS
Input Controls:
a. No central point of journal entry control
b. Under a system of batch entry, input would be more accurate
c. Failure in the internal auditor function and reporting protocol. This oversight would have revealed the reconciliation failure.
d. Generally, the independent auditors do their testing procedures during the interims, i.e. testing of systems commence in the eight or nine month of the calendar or fiscal years, if the SBOA would modify their auditing techniques by advancing the those testing procedures, failure in internal controls may be prevented in the future.
BUY MONEY – POLICE (CITY)
a. In order to assist law enforcement, the Buy-Money
Program should adhere to IC 36-1-3 and, accordingly, the Administration needs to draft an ordinance and the Common Council pass to establish the fund.
PARKING METER FEES (CITY)
a. The Administration needs to establish a special fund
The parking meter fees will be directly deposited in accordance with IC 36-9-12-4.
SEPARATION OF BANK ACCOUNTS
a. The Utility funds are being deposited in the City bank
Account. The Administration needs to establish a separate bank accounts for the Utility only.
CONTRACTS (CITY)
a. The audit of SMG has never been performed in
Accordance with the contract between the City and SMG for 2006, and subsequent to 2006, a reviewed financial statement. It appears that Harding Shymanski was engaged to perform. We as the Common Council request a status report on those engagements and, if completed, a full report on the subsistence.
OVERDRAWN CASH BALANCES
a. Various funds are overdrawn during the calendar year
Due to the timing of the receipt of taxes, generally, property tax. The public would believe that we have over-drafted our checking account, but, these funds are comprised in one or two bank accounts. So, fund A has large balances, while Fund B is in the negative, but, the combined amounts are positive. Nevertheless, according to state law, this can NOT happen during the calendar year. As such, the Administration needs to request from the Common Council, at the direction of the Administration, by temporary ordinance, to loan funds from those funds that are un-restricted and not subject to grant provisions, whereby, any loan would be repaid before year’s end.
BANK ACCOUNT RECONCILIATIONS
a. In accordance to Indiana Code 5-13-6-1(e) “All local
Investment officers (Controller) must reconcile at least monthly to their financial institutions†As such, it should be the responsibility of the Internal Auditor to report the failure of the chief financial officer (Controller) to reconcile any and all public funds to the appropriate financial institution and that report should be presented to the President of the Common Council and the Chairman of the Finance Committee without repercussions.
ANNUAL REPORT
a. As specified in the Indiana Code 5-11-1-4(a), the City’s annual report must be posted on Gate-Way by the 1st day of March for the preceding year. The City has failed to file the annual report several times in the past. As such, the Internal Auditor should report to the Common Council and to the SBOA that the annual report has been filed on a timely basis.
PRESCRIBED FORMS
a. The Munis software fails to produce forms No. 208 &
209. These reports are imperative to the proper presentation of the books and records of the City of Evansville. The Common Council directs the Administration to correct the weakness in our software to allow the appropriate forms.
FINANCIAL REPORT OPINION MODICATIONS
a. The Munis software failed to produce the
Transactional detail necessary to verify to the control totals, i.e. the check book total did not match the bank reconciliation. We, the Common Council, at the direction of the Administration, will provide the necessary resources to correct the City’s IT weaknesses.
b. By allowing the general ledger to remain open until
July of 2012, the year-end control total of the published fund balances were affected by transactions in the current period causing the corruption of the data. The Common Council strongly suggest that the previous years ledgers be close promptly after the filing of the annual report. Any and all adjustments should be made in the current periods and reconciled back to those balances.
c. Within the Utility, the financial system was recorded
On the accrual basis of accounting. Although required by the Indiana Utility Regulatory Commission, the Utility must keep their reporting on the cash basis for the purpose of examination. In regards to the IURC, monthly entries should be reviewed and coordinated to convert the cash basis system producing accrual financial statements. Those entries should be reversed on the first day of the month.
INTERNAL CONTROLS OVER MAJOR
PROGRAMS IN ACCORDANCE WITH
OMB CIRCULAR A-133
FEDERAL GRANTS
INTERNAL CONTROLS OVER FINANCIAL
TRANSACTIONS AND REPORTING
a. Although, the SBOA, presented to the City an
Unqualified Opinion as to the adherence to the provisions of the City’s major Federal Grants, the SBOA cited the same weaknesses in the internal controls relative to the accuracy of the City’s financial reporting. As such, the action by the Common Council is reiterated per the above in reference to expected action of the City’s Internal Auditor. However, the SBOA disclaimed in regards to the Schedule of Expenditures of Federal Awards citing the aforementioned weaknesses.
b. Monitoring of Controls – The SBOA has directed the
Common Council to better understand and develop where necessary controls to assure the compliance thereof. As such, the Common Council should draft an ordinance whereby the Internal Auditor should be responsible to report any violations of those identified controls to the Council. In addition, the Common Council should engage experienced and qualified consultants to monitor and recommend further strengthening of controls.
Don’t you know anything about accounting? The City should not be relying on their auditors for internal controls! The City should establish a set a good internal controls. The auditors are there just to test it.
You have a moron in as the Internal Auditor so don’t think that that’s the solution.
Councilman Friend is not solving anything. He has yet to blame the true guilty parties (JW and Jenny). I am getting sick and tired of him and other City officials blaming the auditors because they failed to do their jobs.
Well said mantis toboggan.
Looks like we are going to have to depend on the real “Brain Trust” of City Council-Weaver and Missy.
Just the other day you and your various pseudonyms were praising John Friend. In fact you and all your other nicks have been Friends of Friend Forever. What up?
You know this would all be very funny had it been the first SBOA audit of the city….but it wasn’t, it’s not like they haven’t been audited 100 times before, they know what forms are needed and what the SBOA expects, new software should have had this from the get-go not some kind of add-on or reprogramming/coding that cost the taxpayers even more money.
With all due respect Mr Friend I see nothing in your statement but a re-hash of the last weeks news here on the CCO (basically a reactive approach), hopefully we’ll see and hear something different tonight at the council meeting….pointing a finger at the Munis software as the culprit isn’t a acceptable explanation of this mess since it went on for 21 months and is still a problem at that water/sewer dept.
I hope you do also ask just how much it is actually costing the tax payers to have two outside accounting firms working to correct these problems and where that money is going to come from in the 2012 budget.
JMHO
I’d have to say 5-7 years in a minimum security prison would be more then fair , in this town tho we give em a $20,000.00 a year raise
CONTRACTS (CITY)
a. The audit of SMG has never been performed in
Accordance with the contract between the City and SMG for 2006, and subsequent to 2006, a reviewed financial statement. It appears that Harding Shymanski was engaged to perform. We as the Common Council request a status report on those engagements and, if completed, a full report on the subsistence.
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When audits are not performed in a timely manner, but rather are performed long after the date when they should have been done, it leaves doubt in people’s minds about the validity of the audited material. Who has had custody of the material, and whether any changes to the material could have taken place.
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Watching the Council meeting on tv. Doesn’t Ted Ziemer remind you of Ron Paul? Crazy old man. Crazy to think that the bond ratings won’t decrease.
I think the Vote No! people should get equal time for the vote yes button he was sporting on camera
The CPA just said that SMG’s records were a mess. Wasn’t Jenny Collins there during one of the first years that they tried to audit. He said that the records were so bad that they couldn’t do an audit. If they did, it would have been a disclaimer too.
Princess Jenny looks pissed. How dare the Council question her? Look at Umbaugh’s Big Dan on tv now. He’s taking up my entire wide-screen!
Missy was looking hot tonight. Is there anyone out there that can hook me up with her.
After all the bluster tonight, the question still remains: When Winnecke took over and was informed by his city controller that the financial ledgers had not been reconciled for all of 2011 WHY DIDN’T HE GO PUBLIC?
Was covering Jonathan Weinzapfels’ ass for 9 months worth all the pain that everyone has gone through?
And lastly, if you had been able to reconcile the ledgers some time between when the audit was supposed to have taken place and when it actually took place, would we have ever found out that they had gone unreconciled for the entire last year of the Weinzapfel administration?
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Two former mayors and a current mayor conspired to withhold vital information from the public for a year and a half, and we are supposed to believe that the Evansville Courier&Press didn’t know a damned thing about it? Not gonna happen in a town this small, so you can add the newspaper as a party to the coverup.
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I’ve said it before and I’ll say it again: This town ought to hold a referendum to determine whether we should remain an incorporated city, or tear up the city charter and Fed Ex it to the Secretary of State in Indianapolis. It is blatantly obvious that the people who have been running this town for the last 10 years have been and continue to be incompetent!
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