Finding 391459 (2023-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-04-01
Audit: 301948
Organization: City of Westminster, Maryland (MD)
Auditor: Sb & Company

AI Summary

  • Core Issue: There is a significant deficiency in internal controls over financial reporting, leading to misstated account balances for the fiscal year ending June 30, 2023.
  • Impacted Requirements: All significant transactions must be included and reconciled at fiscal year end to ensure accurate financial statements.
  • Recommended Follow-Up: The City should enhance internal controls and ensure the accounting department is adequately staffed for timely reporting.

Finding Text

Finding 2023-001 Significant Deficiency in Internal Controls Over Financial Reporting - Fiscal Year End Reporting Repeat Findings: Yes, 2022-001 Criteria: The City’s fiscal year end account balances should include all significant transactions from the reporting period and should be reconciled at fiscal year end. Condition and Context: While management informed us that adjustments would be required after the trial balances were provided to us for audit, adjustments took longer than expected. These adjustments were crucial to ensure the financial statements were complete and accurate. Effect or Potential Effect: The City’s account balances were misstated as and for the year ended June 30, 2023 prior to adjustments being made to correct such misstatements. The potential effect is that accurate information might not be available timely to make management decisions throughout the year as well as at year end. Questioned Costs: None. Recommendation: We recommend that the City review their internal controls processes and procedures over financial reporting to ensure all transactions are recorded in the City’s financial statements, and that their accounting and finance department is fully staffed to ensure timeliness of reporting. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Corrective Action Plan

The finance department experienced staff turnover and vacancies during the fiscal year, impacting the fiscal year end close processes. We have consulted with a fractional CFO and are now fully staffed. We are working to remedy the items noted above by assessing our current procedures and implementing changes for more effective and efficient financial reporting. We are also in the final stages of selecting new ERP software, which would be implemented during fiscal years 2025 and 2026 to allow for more streamlined processes to be implemented. We will be developing comprehensive year end close and audit preparation procedures that will ensure a timely close of the fiscal year.

Categories

Subrecipient Monitoring Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 391460 2023-001
    Significant Deficiency Repeat
  • 391461 2023-001
    Significant Deficiency Repeat
  • 391462 2023-001
    Significant Deficiency Repeat
  • 391463 2023-001
    Significant Deficiency Repeat
  • 391464 2023-001
    Significant Deficiency Repeat
  • 391465 2023-002
    - Repeat
  • 391466 2023-002
    - Repeat
  • 391467 2023-003
    -
  • 391468 2023-003
    -
  • 967901 2023-001
    Significant Deficiency Repeat
  • 967902 2023-001
    Significant Deficiency Repeat
  • 967903 2023-001
    Significant Deficiency Repeat
  • 967904 2023-001
    Significant Deficiency Repeat
  • 967905 2023-001
    Significant Deficiency Repeat
  • 967906 2023-001
    Significant Deficiency Repeat
  • 967907 2023-002
    - Repeat
  • 967908 2023-002
    - Repeat
  • 967909 2023-003
    -
  • 967910 2023-003
    -

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $7.10M
14.871 Section 8 Housing Choice Vouchers $337,131
93.136 Injury Prevention and Control Research and State and Community Based Programs $79,000
16.607 Bulletproof Vest Partnership Program $2,640
16.111 Joint Law Enforcement Operations $1,829