2002-02-13 CC Packet - Laserfiche WebLink

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. ., From: McDonald, Steve [smcdonald@aemcpas.com] Sent: Tuesday, January 29, 2002 7:45 AM To: 'KSYKES@CENTERVILLEMN.COM' Subject: memo from the mayor Hi Kim, I read through the 1/26/02 memo from the mayor and I do agree with a lot of his observations. Over the past 3-4 years, Centervil1e has hired us each year to reconcile the entire year of bank reconciliation's at the time we are doing the audit. Each time we have made it clear that this is a very important task and we received assurances from the previous administrator and the accountant that it would be fixed and they understood how important it was. We also reported to council our problem with accurate coding and the number of journal entries required to adjust the books at year-end. When presented at the council meeting this was framed in the context that these kind of issues take away from the relevance of internal information. This year, during prelim, we asked again and found the bank reconciliations still weren't done, so that along with the deferred comp issue were the main reasons we met in early January. There were errors fixed each time that alone weren't a big deal but in total reduce the integrity ofthe system and may have directly caused some of the mayor's questions. Solutions: First, One of the first problems that I would fix is the computer network. We observed Theresa working between two computers because they were not networked properly. This takes away a lot of efficiencies and is the reason to use a networked system of computers. I also sat at your offices for 45 minutes while Theresa and her assistant tried to get a backup of your finance system data on a CD. I would question if timely backups of finance data are kept in a secure location. I believe your Banyon finance system is fine and don't see a reason to change. We have a lot of hands on experience with this system and several others and it is not worth the time or the money to look elsewhere. Second, a complete bank reconciliation and monthly close process should be done consistently. If these were done timely (within 2 weeks of month end) it would go a long way to fix errors before they were required to go public. The process for completion would be the use of a checklist to indicate what has been done and would address key things like account coding. The checklist would also provide you with some proofthat things are being done correctly. I don't know how much finance is in your background but most administrators I know avoid oversight of detail accounting transactions like the plague. I think it makes it easier if you can oversee the details with a checklist and look at the big picture through reports. We can provide more detail direction on establishing procedures and creating the checklist. Third, this may come before 2nd. Sometimes the Clerk job and the Treasurer job doesn't match very well. This could be addressed with more