BKR Garcia & Co. - Laserfiche WebLink

Home Browse Search

I APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS I I I I I I I I I I I I I I I I I I I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS 05-1 Monthly Reconciliation of Subsidiary Ledger with General Ledger Condition We noted during our audit that there was no formal reconciliation of Utility Accounts Receivable subsidiary ledger with general ledger resulting in various adjustments at year- end. In addition, we also noted that the City did not perform monthly reconciliation of statement of accounts for its investments with the general ledger control accounts. Reconciliation and related verification ensures validity and integrity of the accounting system and these must be regularly and consistently performed to assure proper performance of internal control responsibilities designated to accounting personnel. Recommendation We recommend that the City perform a monthly reconciliation of the receivable subsidiary ledger balance with general ledger control accounts and any differences noted be investigated and resolved immediately to ensure that the financial reports are fairly stated and reliable for decision-making at any given time. We also recommend that the monthly statement of accounts received from the investment agency be reconciled with the general ledger to ensure that all transactions made in the investment portfolio are properly reflected and accounted in the accounting records. ManaQement Response Management is currently reviewing all utility accounts on a bi-monthly basis as part of our billing process. Based on the fact that our accounts are registered in the owner of the property's name, there is less of a need to review the utility accounts; because this is an unrecorded lien that we collect, in full, upon any change in ownership. In addition, we provide bi-monthly bills and delinquent notices to all delinquent account holders. Due to the limited number of transactions in our investment accounts, a quarterly reconciliation of the investment accounts was sufficient. However, since we received funding for the Great Neighborhood Bond in August 2005, the number of transactions in our investment account has increased; therefore, we have started reconciling our investment accounts on a monthly basis. 2