Finding: 2022-001 Limited Segregation of Duties Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The auditors noted during the audit that the available staff precludes a proper separation of duties to assure adequate internal control. Criteria: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Cause: The condition is due to limited staff available. Effect: Lack of segregation of duties could result in a financial statement misstatement, caused by error or fraud that would not be detected or prevented by City staff. Recommendation: The City should continue to evaluate its staffing in order to segregate incompatible duties whenever possible. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to work to achieve segregation of duties whenever cost effective. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-002 Material Audit Adjustments (continued) Recommendation: The City should continue to evaluate its internal control processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year-end balances in accordance with GAAP. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to propose audit adjustments necessary to adjust accounts in accordance with GAAP. Management will review and approve these entries prior to recording them. Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-003 Annual Financial Reporting Under Generally Accepted Accounting Principles (GAAP) Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The City does not have an internal control policy in place over annual financial reporting that would enable management to conclude its annual financial statements and related footnote disclosures are complete and presented in accordance with GAAP. Criteria: The City is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements included related disclosures, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: The City relies on the audit firm to prepare the annual financial statements and related footnote disclosures. However, they have designated an individual with suitable skill, knowledge, or experience to oversee their preparation and have reviewed, approved, and accepted responsibility for the annual financial statements and the related footnote disclosures. Effect: The potential exists that a material misstatement of the annual financial statements could occur and not be prevented or detected by the City?s internal controls. Recommendation: The City should continue to evaluate its internal staff and expertise to determine if an internal control policy over the annual financial reporting is beneficial. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to prepare the annual financial statements and related footnote disclosures in accordance with GAAP. Management will review, approve, and accept responsibility for these financial statements and related footnote disclosures prior to issuance. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-004 Investment Financial Reporting Under Generally Accepted Accounting Principles (GAAP) Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The City does not have an internal control policy in place over investment financial reporting that would enable management to conclude its investment footnote disclosures are complete and presented in accordance with GAAP. Criteria: The City is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements included related disclosures, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: The City relies on the audit firm to prepare the investment related footnote disclosures. However, they have designated an individual with suitable skill, knowledge, or experience to oversee their preparation and have reviewed, approved, and accepted responsibility for the investment related footnote disclosures. Effect: The potential exists that a material misstatement of the investment related disclosures could occur and not be prevented or detected by the City?s internal controls. Recommendation: The City should continue to evaluate its internal staff and expertise to determine if an internal control policy over the investment related disclosures is beneficial. Repeat Finding: No Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to prepare the investment related footnote disclosures in accordance with GAAP. Management will review, approve, and accept responsibility for these investment related footnote disclosures prior to issuance. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-005 Procurement Policy Federal Agency: U.S. Department of Agriculture Federal Program Title: Water and Wastewater Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Pass-Through Agency: Not Applicable Pass-Through Number: Not Applicable Award Period: June 23, 2021 through August 1, 2024 Type of Finding: Material Weakness in Internal Control over Compliance with Other Matter Criteria: The City is responsible for establishing a procurement policy that follows related requirements outlined in Uniform Guidance. Condition: The Uniform Guidance requires governmental entities to have procurement policies that address specific elements, including: the five procurement methods, open competition, conflicts of interest, avoidance of unnecessary or duplicative items, contracting with small and minority businesses, women?s business enterprises, and labor surplus area firms. The City?s procurement policy, although approved by the award oversight agency, did not contain all the required elements as set forth by CFR 2, Part 200, Subpart D. Context: The City did not adopt a procurement policy that met the requirements outlined by the award oversight agency of their sole active federal aid program and was not aware that it needed to establish a procurement policy that follows the requirements outlined in Uniform Guidance. Cause: The City relied on guidance provided by the award oversight agency during the procurement process. Effect: The potential exists that compliance requirements are not being met if the City is not familiar with Uniform Guidance compliance requirements. Repeat Finding: No Recommendation: The City should be familiar with compliance requirements outlined by Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The City approved a procurement policy in 2023 that follows the related requirements outlined in Uniform Guidance.
Finding: 2022-001 Limited Segregation of Duties Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The auditors noted during the audit that the available staff precludes a proper separation of duties to assure adequate internal control. Criteria: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Cause: The condition is due to limited staff available. Effect: Lack of segregation of duties could result in a financial statement misstatement, caused by error or fraud that would not be detected or prevented by City staff. Recommendation: The City should continue to evaluate its staffing in order to segregate incompatible duties whenever possible. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to work to achieve segregation of duties whenever cost effective. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-002 Material Audit Adjustments (continued) Recommendation: The City should continue to evaluate its internal control processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year-end balances in accordance with GAAP. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to propose audit adjustments necessary to adjust accounts in accordance with GAAP. Management will review and approve these entries prior to recording them. Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-003 Annual Financial Reporting Under Generally Accepted Accounting Principles (GAAP) Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The City does not have an internal control policy in place over annual financial reporting that would enable management to conclude its annual financial statements and related footnote disclosures are complete and presented in accordance with GAAP. Criteria: The City is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements included related disclosures, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: The City relies on the audit firm to prepare the annual financial statements and related footnote disclosures. However, they have designated an individual with suitable skill, knowledge, or experience to oversee their preparation and have reviewed, approved, and accepted responsibility for the annual financial statements and the related footnote disclosures. Effect: The potential exists that a material misstatement of the annual financial statements could occur and not be prevented or detected by the City?s internal controls. Recommendation: The City should continue to evaluate its internal staff and expertise to determine if an internal control policy over the annual financial reporting is beneficial. Repeat Finding: This audit finding was reported in the prior year. Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to prepare the annual financial statements and related footnote disclosures in accordance with GAAP. Management will review, approve, and accept responsibility for these financial statements and related footnote disclosures prior to issuance. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-004 Investment Financial Reporting Under Generally Accepted Accounting Principles (GAAP) Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: The City does not have an internal control policy in place over investment financial reporting that would enable management to conclude its investment footnote disclosures are complete and presented in accordance with GAAP. Criteria: The City is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements included related disclosures, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: The City relies on the audit firm to prepare the investment related footnote disclosures. However, they have designated an individual with suitable skill, knowledge, or experience to oversee their preparation and have reviewed, approved, and accepted responsibility for the investment related footnote disclosures. Effect: The potential exists that a material misstatement of the investment related disclosures could occur and not be prevented or detected by the City?s internal controls. Recommendation: The City should continue to evaluate its internal staff and expertise to determine if an internal control policy over the investment related disclosures is beneficial. Repeat Finding: No Views of Responsible Officials and Planned Corrective Actions: The City will continue to rely upon the audit firm to prepare the investment related footnote disclosures in accordance with GAAP. Management will review, approve, and accept responsibility for these investment related footnote disclosures prior to issuance. The Administrator-Clerk-Treasurer is the official responsible for ensuring corrective action of the deficiency.
Finding: 2022-005 Procurement Policy Federal Agency: U.S. Department of Agriculture Federal Program Title: Water and Wastewater Disposal Systems for Rural Communities Assistance Listing Number: 10.760 Pass-Through Agency: Not Applicable Pass-Through Number: Not Applicable Award Period: June 23, 2021 through August 1, 2024 Type of Finding: Material Weakness in Internal Control over Compliance with Other Matter Criteria: The City is responsible for establishing a procurement policy that follows related requirements outlined in Uniform Guidance. Condition: The Uniform Guidance requires governmental entities to have procurement policies that address specific elements, including: the five procurement methods, open competition, conflicts of interest, avoidance of unnecessary or duplicative items, contracting with small and minority businesses, women?s business enterprises, and labor surplus area firms. The City?s procurement policy, although approved by the award oversight agency, did not contain all the required elements as set forth by CFR 2, Part 200, Subpart D. Context: The City did not adopt a procurement policy that met the requirements outlined by the award oversight agency of their sole active federal aid program and was not aware that it needed to establish a procurement policy that follows the requirements outlined in Uniform Guidance. Cause: The City relied on guidance provided by the award oversight agency during the procurement process. Effect: The potential exists that compliance requirements are not being met if the City is not familiar with Uniform Guidance compliance requirements. Repeat Finding: No Recommendation: The City should be familiar with compliance requirements outlined by Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The City approved a procurement policy in 2023 that follows the related requirements outlined in Uniform Guidance.