Agenda - Council - 12/11/1990 - Laserfiche WebLink

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City Council and Residents July 2, 1990 This year, City staff prepared and typed the annual financial statements. We finished our audit work on July 2, 1990, shortly after receiving the necessary information from your computer system, but the financial state- ments were not completed until November. The cause of this delay relates to the initial computer problems, the lack of available time of your staff to handle such a major task, your word processing hardware and software limitations, and the experience level of your staff in preparing and typing complex financial statements. Last year, we were able to prepare and type your financial statements on a timely basis because of efficient procedures developed in the preparation of hundreds of financial state- ments. We allocate a non-interrupted block of time to complete the state- ments; our administrative support staff type hundreds of reports each year; and our word processing equipment is designed for financial state- ments, specifically to handle the unique formatting of municipal financial statements. The preceding review of the problems encountered this past year was pre- sented to explain the unusual delays and more importantly to emphasize the need to avoid these problems in the future. We have discussed these problems and corrective action with the City staff and would like to high- light a few suggestions: ° Make sure you have established an adequate disaster recovery plan, back-up procedures, and control procedures for your new computer system. ° Continually monitor the accounting system to assure all phases are current, and that staff are not behind on their primary responsibilities. ° Cross train City staff in various functions to improve internal controls, continuity, and flexibility in case of turnover or peak staffing needs. ° Consider having us test at preliminary audit field work dates the status of the new system, reconciliations, and other areas that might be potential problems for 1990 closing and audit work. ° Consider using our staff to prepare, type, and produce your annual financial statements. Because of the significant time and cost overruns which we incurred and mostly absorbed, we believe we could reduce the audit costs if we perform these services for you. This arrangement will save both the City and us unnecessary costs while producing the financial statements on a timely basis. We would be happy to present you with next year's engagement letter with an estimated cost on this basis.