Finding 971025 (2022-006)

Condition: The City did not record and reconcile the escrow bank accounts containing the TWDB loan funds. The costs were recorded in the expense accounts and the deposits from the escrow bank accounts were recorded as grant revenue. Criteria: Uniform Guidance Compliance Supplement- Section C- Cash Management. Cause of Condition: THe City's lack of control policies and procedures over cash acccounts. Potential Effect of Condition: The grant revenue is overstated when the City records the escorw deposits as revenue in teh c apital projects fund and the assets are understated due to the City not recording the restricted cash escrow accounts. Recommendation: The City should record all bank accounts in the general ledger. Bank reconciliations should be prepared for all bank accounts. Monthly review and approval of the bank reconciliations and general ledger acccounts should be doen by someone in a supervisory role other than the person preparing the records.