Audit 370718

Finding 2024 – 001: Timesheet Approval Condition: During our current year-end audit procedures, we noted that the employee timesheets were not approved by Department Heads. Criteria: A good system of internal controls would require all timesheets having approvals prior to processing payroll. Cause: The Village lacks a formal policy or enforcement mechanism requiring department approval of timesheets before payroll is processed. Effect: There is an increased risk of inaccurate payroll payments, such as overpayment or unapproved time. This could potentially result in financial loss or noncompliance with regulations. Recommendation: We recommend that timesheets be approved by Department Heads prior to payroll processing as a means of better internal controls. Corrective Action Plan: The Village Administrator, Treasurer, and staff will implement procedures to ensure timesheets are approved by Department Heads prior to processing payroll.

Finding 2024 – 002: Audit Journal Entries Condition: During audit fieldwork, our testing resulted in significant audit adjustments in order to present materially accurate financial statements. Criteria: A good system of internal controls would provide for accurate representations of adjusted account balances for all Village accounts prior to audit fieldwork. Cause: Year-end entries related to various accruals and other items were required in order to accurately present the Village’s financial statements. Effect: The Village’s financial statements were not fully adjusted prior to audit fieldwork. Recommendation: A vital process of effective internal controls is the review and subsequent adjustment of general ledger balances. This review and adjustment will aid in the appropriate budgeting and management of the Village’s financial activities and resources. Corrective Action Plan: The Village Administrator and Treasurer, along with staff, will review year-end adjustments as part of the audit preparation process and work to reduce the number of entries proposed by the auditors and prepare fully adjusted financial statements prior to audit fieldwork.