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• • • CITY OF HALLANDALE BEACH, FLORIDA • SCHEDULE OF FINDINGS AND QUESTIONED COSTS • FOR THE YEAR ENDED SEPTEMBER 30, 2014 • • • SECTION II-FINANCIAL STATEMENT FINDINGS • Material Weaknesses • • 2014-001 Internal control over financial close and reporting • Criteria • • Prudent policies include a formal closing process with supervisory Finance Department • personnel being responsible for the review of transactions and balances recorded — this includes implementing a year-end closing checklist assigning responsibility for completing the procedures • to specific City personnel. Timeliness of closing procedures is crucial to providing accurate • accounting data and financial information including interim and year-end financial statements. • Condition • • During the course of our audit procedures there were numerous material auditor adjusting journal • entries proposed to correct account balances for areas such as administrative charges, due to the ® Hallandale Beach Community Redevelopment Agency (CRA), due from other governments, retainage payable, and expenditures recorded in the grant fund to properly account for the • activity of the Hazard Mitigation Grant. Accounts payable in the Sewer fund was also adjusted • due to an overstatement and a prior period adjustment was recorded in that fund to correct the • treatment of a credit due to the City. In addition, in many instances, schedules requested in our initial planning letter were not readily available at the commencement of our audit engagement: • and/or not accurate and reconciled to the general ledger; some reconciliations for the closing • process were not performed. The result was delay in producing financial reports needed by • management and the auditors whereby the auditors had to propose entries and assist the City to • adjust schedules that City personnel initially prepared. • Cause • Lack of adequate internal controls and a sufficient/timely closing process and development of • formal year-end closing procedures. • • Effect • Multiple account balances were not properly stated prior to performing their necessary closing • procedures causing the auditors to incur a significant amount of time proposing entries and • assisting the City in adjusting schedules that City personnel did not prepare accurately. This also • caused delays in completing the audit and preparation of the City's financial statements. • 0 • 10 • •