CITY OF EVANSVILLE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Section I – Summary of Auditor’s Results

Financial Statement:
Type of auditor’s report issued: Disclaimer
Internal control over financial reporting:
Material weaknesses identified? yes
Significant deficiency identified? none reported
Noncompliance material to financial statement noted? yes

Federal Awards:
Internal control over major programs:
Material weaknesses identified? no
Significant deficiencies identified? none reported
Type of auditor’s report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? no

Identification of Major Programs:
CFDA
Number

Name of Federal Program or Cluster

CDBG – Entitlement Grants Cluster
14.256 ARRA – Neighborhood Stabilization Program
JAG Program Cluster
Highway Planning and Construction Cluster
66.458 Capitalization Grants for Clean Water State Revolving Funds
81.128 ARRA – Energy Efficiency and Conservation Block Grant Program (EECBG)
Dollar threshold used to distinguish between Type A and Type B programs: $449,039
Auditee qualified as low-risk auditee? no
Section II – Financial Statement Findings

FINDING 2011-1 – INTERNAL CONTROLS OVER FINANCIAL TRANSACTIONS AND REPORTING

We noted several deficiencies in the internal control system of the City related to financial transactions and reporting. We believe the following deficiencies constitute material weaknesses

1. Preparing Financial Statements: Effective internal control over financial reporting involves the identification and analysis of the risks of material misstatement to the City’s audited financial statements and then determining how those identified risks should be managed. The City has not identified risks to the preparation of reliable financial statements and as a result has failed to design effective controls over the preparation of the financial statements to prevent or detect material misstatements, including notes to the financial statements.

2. Monitoring of Controls: Effective internal control over financial reporting requires the City Council to monitor and assess the quality of the City’s system of internal control. The City Council has not performed either an ongoing or separate evaluation of their system of internal controls. The failure to exercise their oversight responsibility place the City at risk that controls may not be designed or operating effectively to provide reasonable assurance that controls will prevent or detect material misstatements in a timely manner. Additionally, the City has no process to identify or communicate corrective actions to improve controls. Governmental units should have internal controls in effect which provide reasonable assurance regarding the reliability of financial information and records, effectiveness and efficiency of operations, proper execution of management’s objectives, and compliance with laws and regulations. Among other things, segregation of duties, safeguarding controls over cash and all other assets and all forms of information processing are necessary for proper internal control.

Controls over the receipting, disbursing, recording and accounting for the financial activities are necessary to avoid substantial risk of invalid transactions, inaccurate records and financial statements and incorrect decision making. (Accounting and Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7

FINDING 2011-2 – INTERNAL CONTROL AND COMPLIANCE ISSUES – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS DEFICIENCIES

The Schedule of Expenditures of Federal Awards (SEFA) is required by the U.S. Office of Management and Budget Circular A-133, Audits of States, and Local Governments, and Non-Profit Organizations for entities expending federal funds in excess of $500,000 in order to summarize the use of federal monies received. The City did not have procedures in place whereby grants applied for by the various City Departments and approved by the City Council are summarized and the information coordinated with the City Controller’s office in order for financial activity associated with federal grant funds awarded to be properly identified and recorded in the financial records.

Due to this internal control deficiency, we were unable to issue an opinion on the SEFA. We also could not determine if all major programs were identified.

Circular A133 Subpart C section .300 states:

“The auditee shall:

(a) Identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity.

(b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.”

Accounting records and other public records must be maintained in a manner that will support accurate financial statements. Anything other than an unqualified opinion on the Independent Auditors’
Report on the financial statements may have adverse financial consequences with the possibility of an increase in interest rate cost to the taxpayers of the governmental unit. (Accounting and Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7) We recommended that the City implement procedures and controls to ensure that required information is properly identified and available for preparation of the SEFA.

FINDING 2011-3 – COMPLIANCE ISSUE – BANK ACCOUNT RECONCILIATIONS

Fund balances were not reconciled to bank balances for the entire year of 2011. As of July 31, 2012, City officials were still unable to reconcile the ledger to the bank account and were still making corrections to the December 31, 2011 fund balances. New accounting software was implemented in 2011. The new accounting system is not producing accurate fund statements which can be reconciled to the bank account. Indiana Code 5-13-6-1(e) states: “All local investment officers shall reconcile at least monthly the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories.”

At all times, the manual and/or computerized records, subsidiary ledgers, control ledger, and reconciled bank balance should agree. If the reconciled bank balance is less than the subsidiary or control ledgers, then the responsible official or employee may be held personally responsibility for the amount needed to balance the fund. (Accounting and Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7)

Because the fund balances could not be reconciled to the bank balances at year end, the accuracy of any fund’s receipts, disbursements and balances, as reported in the financial statement, cannot be verified. We recommended that the City officials take steps necessary to reconcile the December 31, 2011 bank balance to the total fund balance. After 2011 has been reconciled, City officials should reconcile monthly on a timely basis.

http://www.in.gov/sboa/WebReports/B41037.pdf

The New Harmony Gallery of Contemporary Art presents Intervention Landscapes by Armin Mühsam. The exhibit runs from October 6 through November 11. An opening reception will be held from 5 to 7 p.m. October 6. The reception is free and open to the public.

Intervention Landscapes is a series of paintings that combine traditional landscape painting with the presence of human-built objects.

“Technology in this sense encompasses all human activity to assert control over the land; in this process, technology also transfers its values and its symbols to architecture,” Mühsam said. “Because technology envelops us so thoroughly, we accept it as the only possible reality. The more we are enclosed by it, the less we notice that we lose touch with the natural, unmediated world.”

Mühsam is associate professor of art at Northwest Missouri State University in Maryville, Missouri. He received his Bachelor of Fine Arts degree in illustration from the University of Applied Sciences in München, Germany, and his Master of Fine Art degree in painting at Montana State University.

More information about Mühsam’s work can be found on his website at http://www.freshrod.com/armin/biography.html.

The New Harmony Gallery of Contemporary Art is located at 506 Main Street in New Harmony, Indiana, and is open from 10 a.m. until 5 p.m. Tuesday through Saturday and from noon until 4 p.m. on Sunday.

Nominations are now open for EVSC’s 2012 Hall of Fame, sponsored by EVSC Foundation. The deadline for accepting nominations will be Oct. 31, 2012. The selected honorees will be announced in November 2012.

Nominees should be:

· EVSC alumni whose lifetime achievements warrant consideration.

· Non-EVSC alumni who has made a positive impact on publication education in the greater community.

Nominations may be made by going to: http://www.evscschools.com/evsc-offices/office-development and filling out the online nomination form, or by stopping by the EVSC Administration Building, 951 Walnut Street, to pick up a form. Forms are due by Oct. 31 to the EVSC Office of Development, 951 Walnut Street, Evansville, IN 47713.

The EVSC Hall of Fame honors distinguished individuals who exemplify outstanding achievement in their life’s work. The Hall of Fame is intended to inspire EVSC students to seek excellence in their own education and careers and is intended to emphasize the importance of service to the community. A gala ceremony honoring the new inductees is being planned for March 20, 2013.

Co-chairmen of the 2012 Hall of Fame are: Wayne Henning, retired executive vice president regional chief operating officer for Old National Bank; Randy Miller, founder of South Western Communications, Inc. and former president of EVSC Foundation; and Ben Shoulders, assistant vice president commercial relationship manager for Fifth Third Bank.

In September 2010, the first class of inductees into the EVSC Hall of Fame was named and honored. They included:

Brent Beeler

A graduate of Harrison High School and Indiana State University, Beeler dedicated his career to building Berry Plastics into a multi-billion dollar international business.

Charles H. Bundrant

Bundrant followed his dream after graduating from North High School to Alaska, where he founded Trident Seafoods, America’s largest and most successful seafood company.

Gayle Cook

A graduate of Bosse High School, Cook and her late husband, Bill Cook, founded the medical manufacturing company Cook Group Incorporated and revitalized historic towns through their generosity and vision.

Lee Hamilton

A graduate of Central High School and former congressman for Indiana’s ninth district, Hamilton serves as the director of the Center on Congress at Indiana University and previously served as the president and director for the Woodrow Wilson International Center for Scholars in Washington, DC.

Donald B. Korb

A graduate of Stanley Hall and Bosse High School, Korb was instrumental in the early development of Crescent, Cresline and Wabash Plastics companies and graduated from both Wabash College and Harvard Business School.

James A. McCarty, Sr.

A Bosse High School graduate, founder of Colonial Garden Centers, Inc., and a real estate developer, McCarty created the Bosse C.A.R.E.S. Program, which prepared high school students for post secondary careers and education, and inspired the district-wide Southern Indiana Career Access Network (SICAN) now in place in the EVSC.

William G. Mays

A graduate of Central High School, and attended Lincoln High School, Mays founded Mays Chemical Company which provides chemical products to the food, pharmaceutical and automotive industry and owns the nation’s fourth oldest surviving African American newspaper, The Indianapolis Recorder.

Mattie Miller

Miller was considered by many as a pioneer and bridge-builder for race relations in the 1960’s through today, and retired as a beloved principal from Harper Elementary School.

William Ridgway

After a distinguished career in his family-owned ophthalmology business, Dr. Ridgway established Harlaxton College in Grantham England for the University of Evansville.

John H. Schroeder

A graduate of Bosse High School, Wabash College, and Harvard Business School, John H. pioneered the plastics industry and developed Evansville as a nucleus of this country’s “Plastic Valley,” as well as championing many philanthropic organizations.

Randall Shepard

A graduate of Harrison High School, Judge Shepard was appointed to the Indiana Supreme Court in 1985 at the age of 38 and became Chief Justice in 1987. He recently retired from the position and is now executive in residence at the Indiana University Public Policy Institute in Indianapolis.

Matt Williams

A graduate of Reitz High School, Williams started his television career as a writer/producer for “The Cosby Show.” He has several movies and television programs to his credit, but may be best known as the creator and executive producer of the hit series “Roseanne,” and the co-creator and executive producer of “Home Improvement.” It was during this time that his work was honored with Emmy and Humanitas nominations, as well as sharing a Peabody Award for outstanding achievement in television writing.

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