Finding Text
Condition: The City’s personnel prepared bank and investment account reconciliations at year end but did not properly reflect balances at year end on the reconciliation schedule. As a result, year-end reconciled account balances were inaccurate. Criteria: An appropriate system of internal control requires the City to reconcile account balances on a regular basis. Cause: One TEDA bank account is not recorded or reconciled in the accounting system, Other bank accounts have materially significant old outstanding checks and a check over $500,000 that was voided but not reflected as such in the accounting system. False check numbers were also used leading to a duplicate item to remain outstanding for over a year. In addition, the certificates of deposit balances were not updated in the accounting system. 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 control system. Recommendation: The City should consider researching and cleaning up old outstanding bank items, create a new general ledger account for the TEDA bank account, and perform monthly reconciliations for all accounts.