Finding Text
CAPITAL ASSET DETAIL - CRITERIA: STRONG INTERNAL CONTROL REQUIRES THAT A DETAILED LISTING OF CAPITAL ASSETS BE MAINTAINED. A DETAILED LISTING OF CAPITAL ASSETS WITH ORIGINAL COST AMOUNTS IS ESSENTIAL TO THE ACCURATE COMPUTATION OF DEPRECIATION EXPENSE. CONDITION: THE TOWN AND UTILITY BOARDS FAILED TO MAINTAIN A DETAILED LISTING OF CAPITAL ASSETS THAT HAVE HISTORICAL COST AMOUNTS. CAUSE: HISTORICAL RECORDS OF THE TOWN AND UTILITY BOARDS ARE INSUFFICIENT TO REGENERATE A DETAILED LISTING OF CAPITAL ASSETS THAT CORRESPOND TO THE ACCOUNT BALANCES CARRIED BY THE TOWN AND UTILITY BOARDS TO THEIR GENERAL LEDGER. EFFECT: THE EFFECT OF THIS CONDITION IS THAT INTERNAL CONTROL OVER CAPITAL ASSETS IS WEAKENED. RECOMMENDATION: THE TOWN AND UTILITY BOARDS SHOULD CONDUCT A THOROUGH INVENTORY OF ALL CAPITAL ASSETS. ONCE COMPLETED, THE INVENTORY SHOULD BE USED TO COMPLETE A DETAILED LISTING OF ALL CAPITAL ASSETS AND THIS LISTING AGREED TO THE APPROPRIATE GENERAL LEDGER ACCOUNTS. VIEW OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION: MANAGEMENT HAS STATED THAT THEY WILL CREATE A COMPLETE DETAILED LISTING OF ALL CAPITAL ASSETS AND DEPRECIATION SCHEDULE; HOWEVER, RECORDS OF THE TOWN AND UTILITY BOARDS ARE INSUFFICIENT TO ALLOW MANAGEMENT TO COMPARE IT TO EXISTING INFORMATION IN THE ACCOUNTING RECORDS.