Аудит выявил системные нарушения в финансовой отчетности и бюджете города Паттерсон

PATTERSON, La. (Acadiana News First) - An audit of the city of Patterson reported repeat findings, the Louisiana Legislative Auditor reports. You can read the audit - which was filed late - by scrolling down. But here’s the Legislative Auditor’s summary of the report: The independent auditor’s report had nine findings – six of which were repeated from the previous year. The auditor found several material adjustments had to be made to the City’s financial statements, and the City failed to amend its General Fund and Sewerage and Solid Waste Sales Tax Fund budgets when actual expenditures exceeded budgeted expenditures by more than 5% and failed to amend its General Fund and Ad Valorem Tax Collection Fund budgets when the actual beginning balances for each failed to meet the estimated beginning balance amount for each by more than 5%. In addition, the City failed to file its audit report with the Legislative Auditor’s office within the required time frame, accrued penalties and interest for failing to remit its payroll taxes in a timely manner, and accrued penalties and interest for failing to remit payments for contracted obligations in a timely manner. The City also failed to maintain adequate supporting documentation for all accounting transactions and failed to include bank accounts and certificates of deposit for the Lower Atchafalaya Cultural District and the Volunteer Fire Department in its financial statements. The auditor found as well that the City lacked adequate segregation of duties for its accounting functions and failed to comply with provisions in the Local Government Budget Act related to the adoption of budgets. Here are the findings broken down with management’s response to them: Finding 1: During the performance of audit procedures, audit adjustments were proposed to correct misstatements that, individually and in the aggregate, were material to the City’s financial statements. The cause of the condition is failure by management to design and implement effective internal controls such that there is a reasonable possibility that a material misstatement will be prevented or detected and corrected on a timely basis by management or employees, in the normal course of performing their assigned functions. Management’s response: The City is working to ensure that all necessary adjustments are captured and included in its financial statements prior to the commencement of audit procedures. Bank statements are being printed, and bank reconciliations are being done on a monthly basis. Bank statements also have the date they were completed on and signed off by someone from the council. Finding 2: Expenditures and other financing uses in the General Fund and Sewerage and Solid Waste Sales Tax Fund exceeded budgeted appropriations by greater than five percent, in each fund respectively. Also, actual beginning fund balance failed to meet estimated beginning fund balance in the General Fund and Ad Valorem Tax Collection Fund by greater than five percent, in each fund respectively, and fund balance was used to fund current year expenditures in each of those funds. The condition results from the failure to amend the operating budget for expenditures and transfers when they exceed budgeted appropriations by greater than five percent, and from the failure to amend the operating budget for beginning fund balance when it fails to meet actual beginning fund balance by greater than five percent. The City is not in compliance with the Local Government Budget Act. Management’s response: The City has been closely monitoring the budget and has been making necessary amendments as required. The budget will be amended several times throughout the fiscal year. The city is monitoring revenues and expenditures on a monthly basis. Finding 3: Louisiana R.S. 24:513 et seq. provides for the following: “Such audits shall be completed within six months of the close of the entity’s fiscal year.” The City’s audit report was not completed and submitted to the Office of the Legislative Auditor within six months of the City’s fiscal year end. Management’s response: The City is working to ensure that its books and records are complete in sufficient time for its independent auditors to perform their audit procedures and complete the audit engagement to allow for the submission of the completed audit report to be submitted in a timely manner. The City has contracted with an external accounting firm to assist with closing its books, making necessary accruals and reclassification adjustments, and ensuring that necessary documentation is gathered to support the underlying account balances in the financial statements. The City is planning on starting the audit earlier than they have in the past to be able to make sure the audit is completed on time. Finding 4: The City was delinquent in remitting payroll tax payments to federal tax authorities. Additionally, the City’s delinquent outstanding balance of payroll tax deposits from prior fiscal years resulted in the incurring of further interest and penalties. The City has been assessed penalties and interest for the failure to timely file and remit payroll taxes. Management’s response: The City is aware of its obligations for the timely payment of payroll taxes. The City has filed a tax abatement. The City has been paying payroll taxes on time since the change in employment. The City will start making payments towards the back taxes. Finding 5: The City remitted a financed purchase obligation payment after the due date resulting in additional interest charges. The City has been assessed penalties and interest for the failure to timely remit the payment under contracted obligations. Management’s response: The City is aware of its responsibilities for the timely payment of its obligations to its creditors and the negative results of failing to remit lease payments in a timely manner. The City Clerk and City Accountant are working together daily to get payments mailed out in a timely manner. Payments are being made on time to purchase obligations. The late payment was from late fees from payments from the previous City Accountant. Finding 6: The City could not produce support for certain revenues, expenditures, and journal entries selected by auditors for testing. The condition results from the failure to maintain appropriate accounting records to support certain transactions which were selected by auditors for testing. The City may not be in compliance with Louisiana R.S. 24:515 A. Management’s response: The City is implementing procedures to ensure that adequate support is maintained for all accounting transactions. The City will ensure that all expenditures are adequately supported by valid documentation and that the documentation is readily available for review by its auditors. Finding 7: During the performance of audit procedures, there were multiple bank accounts and certificates of deposit found to be under the City’s control that were not previously included in the City’s financial statements. These were added to the City’s general ledger in the current year via prior period adjustments, which were individually and in the aggregate material to the City’s financial statements. The effect of the condition is that financial statements may contain a material misstatement that is not detected and corrected. Management’s response: The City will include the missing bank accounts and certificates of deposit in the City’s financial statements. The bank account was already added to the general ledger and bank reconciliations have been being done on the account. The accounts and certificates of deposit have been open for longer than one year. Finding 8: Per review of internal control procedures, it was noted that the employees responsible for processing payments to vendors are also responsible for mailing those signed checks and have access to add or modify the vendor list. Therefore, the City does not have adequate segregation of functions within its accounting system. The cause of the condition is failure by management to design and implement effective policies and procedures necessary to achieve adequate internal control. The likelihood that a material misstatement will not be prevented or detected and corrected on a timely basis is increased. The perpetration of fraudulent activity is easier to achieve under this condition. Management’s response: The City acknowledges the audit findings, but due to limited number of staff full separation of duties is not always feasible. The City has implemented that Angelika will modify or update vendor information, Angie will print and stuff the checks, Midge will sign the checks, and either Julia or Mary will drop them off at the mail. Finding 9: The City failed to make the proposed budget available to the public for inspection prior to the beginning of the fiscal year. The budget was adopted by the council at an open meeting falling after the beginning of the fiscal year. The condition results from the failure to design and implement or follow implemented policies and procedures to ensure compliance with the Local Government Budget Act. The City is not in compliance with the Local Government Budget Act. Management’s response: Here’s the audit report: