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I I APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS I I. CURRENT YEAR FINDINGS AND RECOMMENDATIONS (CONTINUED) I 05-6 Aging Analysis for Utility Accounts Receivable (Continued) Manaoement Response I I We disagree with this finding. Management currently reviews all utility accounts on a bi- monthly basis. This review is in conjunction with the utility billing cycle. We review past due accounts and ensure that their accounts do not reflect any usage. In addition, bi-monthly statements and late notices are mailed to all current and delinquent customers. Furthermore; we have reduced the allowed outstanding balance to further induce payment, thus increasing cash flows. I 05-7 Credit Card Policy I Condition I Existing credit card policies and procedures of the City do not provide limitations and restrictions as to nature of expenditures that may be charged using the credit card. We noted the following control weaknesses during our review of credit card transactions: I a) We noted several charges pertaining to purchase of flowers, gift cards and donations and these types of expenditures are prohibited expenditures using state fund as stated under the provisions of State Department of Financial Services' Reference Guide for State Expenditures. I b) We also noted several credit card purchases where the purpose of the disbursement cannot be ascertained due to lack of documentation to substantiate the charges. Examples of these credit card charges are purchases of grocery and similar items from various retail store chains. I Recommendation I I We recommend that the City revise its existing policies and procedures on credit card purchases and provide a more stringent process to limit the possibility of misuse and misappropriation of the City's fund for personal benefits. Manaoement Response I Management disagrees with the auditors' interpretation of the Florida State Statue as to the use of credit cards. The referenced policy refers to State agencies and departments, while we believe that Home Rule allows us to implement our own policy. Management is in the process of updating our current credit card policy and procedures to better address the allowed uses. I I I 6 I