Get Town Hall in order before moving sewer collections:
from the fiscal year 2018 Town audit management letter.
3. Closing Checklists
Closing checklists are employed by accounting departments to better ensure that all
routine and non-routine accounting transactions and reconciliations are performed and the
final outputs (i.e., the Town’s balance sheet and Schedule A) are reviewed for accuracy
and completeness. The use of closing checklists is commonplace in private industry but is
seldom used in the public sector.
The
Town had great difficulty getting its free cash approved; in the end it was approved at
the expected amount, but the Department of Revenue process was not used properly. We
recommend that the Town Accountant, Treasurer/Collector develop a closing checklist to
monitor and track the annual accounting close in order for the process to be more efficient
in the future.
6. Indirect Costs
(repeated from prior year)
Water, sewer, and light indirect costs are approved at Town Meeting, and transfers are
made annually into the General Fund. However, they are not reflected as transfers on
the tax recap, but instead as miscellaneous revenues and expenses. Furthermore, the
transfers are not made if sufficient resources do not exist in the enterprise funds, and
there is no formal process to the calculation of indirect costs from year to year.
A more comprehensive calculation of indirect costs should be undertaken, documented,
and signed off by the Town and enterprise funds with updates performed every few
years.
9. Treasurer/Collector Office (repeated from prior year)
In our letter to management dated March 23, 2017 we identified 17 critical areas in the
Treasurer/Collectors Office that needed to be addressed. Many of those have been
addressed through fiscal year 2018, however some remain and should be addressed in the
current fiscal year.
Those are highlighted as follows:
• While efforts are made to collect cash from department heads weekly, there is no
formal policy regarding cash held by departments outside the Treasurer’s Office.
The
Treasurer was unaware that all Town cash is under the Treasurer’s control, and the
Treasurer has the duty to force effective internal control policies on all departments
who handle cash.
• Presently, the Collector does not use a lock box to collect taxes. A lock box is
essentially a third-party collector of taxes. Taxpayers mail their payments to a Post
Office box, and the third-party collector deposits the funds for the Town and posts
activity for all those who have paid. Daily, an electronic file is then sent to the Town
where payments are uploaded automatically to the Town’s system.
• Cash forecasts are currently not prepared as part of a monthly routine.
This is a
critical process for Towns that are cash stressed; we suggest such a process is
implemented immediately.
