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I I I III. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS - (CONTINUED) No. 2000-09 Compliance with Laws and Regulations I I During the performance of prior audits, it was noted numerous violations with the Village's compliance with applicable laws and regulations. The following summarizes those findings: I 1, There was no documentary evidence to support budget amendments or reappropriations for fiscal year 2000. 2, In addition, expenditures exceed appropriations for Building Code Enforcement Capital Outlay and Debt Services (Leases). I 3, There are no formally adopted written policies and procedures to help ensure the Village complies with State laws and regulations. I While no matters came to the attention of the prior auditors that indicated that action had been taken against the Village for these violations, the possibility does exist that action could be taken by the State, if these violations are not addressed and properly corrected, I Recommendation: It was recommended that the Village take immediate action in curing its existing violations of laws and regulations. Upon clearing these issues, the Village should take steps to develop and adopt formal written policies and procedures, which address compliance with all applicable laws and regulations. Management should also take steps to ensure that once established these policies and procedures be properly applied and adhered to. I I Current Year Status: The Village had no expenditures in excess of appropriations during 2006 and there were no findings relating to support for budget amendments, However, the Village has not established written policies to ensure compliance with laws and regulations. Comment #1 and #2 above, will not be repeated, but Comment #3 will be repeated. I Management's Response: The Village plans on developing and establishing policies and procedures to be in place for 2007. I REPORTABLE CONDITION No. 2005-01 Financial Condition Assessment I Condition: In connection with our audit of the Village, we applied financial condition assessment procedures pursuant to Section 10.556(8), Rules of the Auditor General, to determine if deteriorating financial conditions exist that may cause a financial emergency to occur if actions are not taken to address such conditions. The results of our assessment indicated that the Entity's overall financial condition is deteriorating. I I The Village's total unreserved fund balance has been declining over the past three years due to recurring losses in its General Fund, Recurring losses indicate that revenues are not sufficient to cover expenditures or that expenditures are excessive, I Effect: By not taking the steps necessary to reverse these losses, the Village will continue to deplete its unreserved fund balance until the point that it reaches a State of Financial Emergency, I Recommendation: We recommend that the Village research all possible venues to reduce costs or increased revenues or both to stop the recurring deficits and declining unreserved fund balance in the General Fund, I I