Agenda - Council - 08/23/1988 - Laserfiche WebLink

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Honorable Mayor and Councilmembers May 4, 1988 Purchase Order System The City has a purchase order system which is used on certain large purchases. We believe this system should be expanded to cover all pur- chases with a few specific exclusions. This will provide additional budget controls, internal controls, documentation of authorizations, and consistent usage of this valuable procedure. Special Assessment Records The City was able to reconcile the special assessment cards maintained at the City Hall with the records of the County. These records are very important to the City because the County doea not provide all of the needed information associated with special assessments. It is also bene- ficial for the City to reconcile annual certifications and balances because it is not uncommon to see errors in assessment levies. I The City should consider computerizing these records to provide current data and control over special assessments. These records would also pro- vide needed information for evaluating debt funds and projecting cash flows. They would I also provide deferred special assessment balances by fund which technically should be reflected on the City's financial state- ments, but has not been available in the past. I i General Accounting System and Procedures I The City has obviously obtained a high degree of annual reporting quality as recognized by the Government Finance Officers Association's, "Certificate of Achievement forlExcellence in Financial Reporting" program. However, many of the comments included within this letter indicate deficiencies or weaknesses in the accounting system. More speCifically, we see a lack of availability and accuracy of financial information on an interim or timely basis. This information is essential for management to make effective decisions, to anticipate financial needs, and to avoid unexpected finan- cial problems. I I I Many accounting procedures are performed only once a year and are completed several months after year-end which should be performed on a regular basis. Examples of these procedures include: reconciliation of certain account balances, updating fixed asset records, balancing devel- oper escrow accounts, following up on unpaid accounts receivable, and others. This practice results in inaccuracies in interim financial data, potential losses to the City, increased risk of accounting errors, and decrease of internal controls. Also evident is certain inconsistent usage and enforcement of procedures and controls. An accounting procedural manual should be developed addressing the basic accounting system, purchase order system, cross training, billing procedures, deadlines, compliance matters, etc. A formal manual should improve the timing and consistency of procedures, strengthen internal controls, and facilitate the training of new staff. We believe this is especially important in view of the City's need to increase accounting staff in response to the increased complexity and volume of accounting work load.