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I I I I I I I I I I I I I I I I I I 'I L______ III. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS No. 2000-07 Capital Assets During prior audits, a number of issues associated with internal controls over capital assets were noted, The following summarizes issues identified as a result of those procedures: 1. The Village has no written capitalization policy and instead leaves determination of which items to capitalize to department heads. 2. Changes in status of capital assets (i,e. sale, obsolescence, etc.,) are not reported to finance for proper accounting of such changes. 3. Periodic reviews of insurance are not performed to ensure that coverages are sufficient based on capital assets held by the Village, 4, The Village's capital assets have not been tagged as Village property, a physical inventory is not being performed at least annually, and such inventory is not compared with physical records and discrepancies corrected, Internal control over capital assets is essential in helping the Village ensure that its capital assets are being properly accounted for and that theft or other inappropriate activity is not occurring. By not having these controls in place, the Village is exposed to possible loss. In addition, the Village cannot ensure that it is meeting its fiduciary responsibility over the administration of public resources. Recommendation: The prior auditors recommended that the Village develop and adopt written policies and procedures, which ensure capital assets are being properly monitored and accounted for. In addition, management should take steps to ensure that these policies are adhered to and properly applied. Current Year Status: All of the recommendations above have been implemented, except for #4. This comment will be repeated. Management's Response: The Village plans on developing and establishing policies and procedures to be in place for 2007 and taking a physical inventory of its capital assets. No. 2000-08 Personnel Policies and Procedures During prior audits over payroll and analysis of internal controls over payroll, it was noted that the Village has not developed a written personnel policies and procedures manual. As a result, it was noted that personnel policies were not consistent between departments of the Village. By not having written personnel policies, the Village is exposing itself to risks associated with potential claims from personnel related matters. In addition, employee duties and responsibilities are not defined resulting in inefficiencies in the Village's operations, Recommendation: It was recommended that the Village develop and adopt a written personnel policies and procedures manual. Once written and adopted, Village management should take steps to ensure that these policies are being followed and adhered to. Current Year Status: As of September 30, 2006, the Village had not established a written personnel manual. Comment will be repeated. Management's Response: The Village is in the process of developing and establishing policies and procedures to be in place for 2007- 2008. It has currently issued memos to Village staff communicating what the policies are and policies are also included in the union contracts,