Audit 346292

Item 2024 - 001: Segregation of Duties. Condition and Context: During our consideration of internal control, we noted that the assignment of responsibilities to the Town’s General Fund accounting staff did not provide for an optimum segregation of duties. Criteria: Proper segregation of duties between those responsible for the custody of assets, authorization of transactions, and recording of accounting transactions serves as a basic internal control to prevent error and fraud. Cause: During the year ended June 30, 2024, one person performed two or more of these functions in the normal course of performing their duties. Effect: Errors, omissions, and irregularities may be present and go undetected by management. Recommendation: We recommend the Selectboard remain involved in the financial affairs of the Town to provide oversight and independent review functions. A segregation of duties concern will exist as long as the size of the Town's financial staff and the assignment of duties remains the same. Management’s Response: The Selectboard has been made aware of the deficiency in segregation of duties and is willing to accept the risk associated with the current delegation of duties. The Treasurer reconciles the bank statements and prepares a financial report for review by the Selectboard at regular monthly meetings.

Item 2024 - 002: Reconciliation of the Town’s Accounting Records. Condition and Context: During the course of the audit, we proposed 20 journal entries to be recorded by management of which 8 are material. Criteria: Review and monitoring procedures are an integral part of internal control. Cause: Lack of review by those charged with governance could allow financial irregularities and errors to go undetected. Effect: Errors, omissions, and irregularities may be present and go undetected by management. Recommendation: We recommend that reconciliations be performed monthly and any variances should be investigated immediately. Management’s Response: This was mostly due to turnover of Town personnel and implementation of a new accounting software, which resulted in issues with beginning balances and reconciliation of accounts. Management realizes the importance of performing reconciliations and is in the process developing processes for future reconciliations.

Item 2024 - 001: Segregation of Duties. Condition and Context: During our consideration of internal control, we noted that the assignment of responsibilities to the Town’s General Fund accounting staff did not provide for an optimum segregation of duties. Criteria: Proper segregation of duties between those responsible for the custody of assets, authorization of transactions, and recording of accounting transactions serves as a basic internal control to prevent error and fraud. Cause: During the year ended June 30, 2024, one person performed two or more of these functions in the normal course of performing their duties. Effect: Errors, omissions, and irregularities may be present and go undetected by management. Recommendation: We recommend the Selectboard remain involved in the financial affairs of the Town to provide oversight and independent review functions. A segregation of duties concern will exist as long as the size of the Town's financial staff and the assignment of duties remains the same. Management’s Response: The Selectboard has been made aware of the deficiency in segregation of duties and is willing to accept the risk associated with the current delegation of duties. The Treasurer reconciles the bank statements and prepares a financial report for review by the Selectboard at regular monthly meetings.

Item 2024 - 002: Reconciliation of the Town’s Accounting Records. Condition and Context: During the course of the audit, we proposed 20 journal entries to be recorded by management of which 8 are material. Criteria: Review and monitoring procedures are an integral part of internal control. Cause: Lack of review by those charged with governance could allow financial irregularities and errors to go undetected. Effect: Errors, omissions, and irregularities may be present and go undetected by management. Recommendation: We recommend that reconciliations be performed monthly and any variances should be investigated immediately. Management’s Response: This was mostly due to turnover of Town personnel and implementation of a new accounting software, which resulted in issues with beginning balances and reconciliation of accounts. Management realizes the importance of performing reconciliations and is in the process developing processes for future reconciliations.