Finding Text
Conditions and Criteria: The City of Olean prepares its bank reconciliation electronically utilizing its accounting software. The cash balances per the bank reconciliations for the General, Water, Sewer and Capital did not agree the general ledger. The bank reconciliations also includes transactions that were not correctly recorded during the current year.
Effect: At times throughout the year, the City’s cash balances reported within its general ledger are incorrect. The effect of not investigating and correcting bank reconciliation transactions that are improperly posted is that reporting errors in financial reporting can occur and not be detected or resolved in a timely manner.
Auditors’ Recommendation: As part of the bank reconciliation preparation and review, the City’s general ledger cash balances should be compared against the bank reconciliation, with any differences being immediately investigated and corrected. City’s Response: The City Auditor, Lens Martial, understands the importance of the bank reconciliation process and will investigate and correct any reconciling differences as they occur. Differences existed related to the timing of payroll transfers made from the general checking account to the payroll account. The City Auditor will put a process in place to verify that these transactions are properly accounted for on the bank reconciliations.