HomeMy WebLinkAbout20013114.tiff ANdERSON
L!e EIWEIITNEy,w
Darn L (504).11 8e8n _el
rdOAdo s°.U) , 511 !`?. 117
October 22, 2001
Board of County Commissioners
Weld County, Colorado
Greeley, Colorado
Members of the Board:
We have completed our audit of the financial statements of Weld County, Colorado for the
year ended December 31, 2000. During our audit, we developed the following comments and
recommendations as of May 25, 2001:
TREASURER'S ACCOUNT RECONCILIATIONS
During our procedures at the Treasurer's office, we noted that cash on hand was not being
properly reconciled. The daily reconciliation was directed toward reconciling daily cash receipts and
not to the cash balance in the Eagle system. We recommend that the reconciliation procedures be
expanded to included reconciling to the daily cash balance.
We also noted that the bank accounts and investments that the Treasurer holds had not been
reconciled to the Treasurer cash due to County departments and other local governments. This
reconciliation is an important control and should be prepared monthly.
We also noted that the Treasurer's operating bank account was not promptly reconciled each
month by the Treasurer. This reconciliation is an important control and should be prepared promptly
each month.
Management Response:
Pursuant to Deloitte & Touche's observations and recommendations, the Treasurer's office
has redesigned its daily cash activity report. The current report, designed by the Treasurer,
reconciles beginning-of-day, daily business, and end-of-day balances and the day's receipt activity
to the general ledger posting for the day.
The Eagle system was designed to properly allocate,without human intervention, all funds
to be distributed to county departments or county taxing authorities, and has performed that task
without material error(given the accuracy of the data it receives from other county agencies). Any
investments which the Treasurer holds for other county departments have been accurately tracked
accounted for within the Evare system. T ‘'42(C
2001-3114
� ,.-;^ . L! .. , 5 -\N;0 AND BUSINESS
Board of County Commissioners
Weld County
Page 2
October 22, 2001
The Treasurer personally performs each monthly bank reconciliation,usually completing that
reconciliation within five business days of receiving the bank statements. The reconciliation
statement will, from time to time, carry"open items"which require further investigation, either by
the Treasurer's staff or the bank, before they can finally be taken off the reconciliation statement,
posted to the general ledger, and a resolution of the issue is reached.
SEGREGATION OF DUTIES
During our procedures at the Treasurer's office, we noted a lack of segregation of duties.
One cashier was allowed to receive cash receipts,post cash receipts,balance the daily cash receipts,
prepare the bank deposit, and follow-up on deposit differences and NSF checks with the bank. We
recommend that some of those duties be segregated to create better controls. For example, an
employee not involved in receiving cash should prepare or verify the deposit being sent to the bank
and an employee not involved with receiving cash should follow-up on deposit differences and NSF
checks with the bank.
The Treasurer authorizes, initiates, and records investment purchases and sales in the Evare
system. The Treasurer provides the purchase and sale information to another employee to record
in the Eagle system. The Treasurer also reconciles the bank account where the sales proceeds are
deposited and purchases are made. There is also no complete reconciliation between the Evare and
Eagle systems. We recommend that some of those duties be segregated to create better controls.
For example, the Treasurer could authorize and initiate sales and purchases and another employee
could record the transaction in Evare. An employee that does not post investment transactions in
Evare or Eagle should reconcile the two systems monthly.
Management Response:
The Treasurer has already implemented a number of changes to improve segregation of
duties within the office. Further implementations are contingent upon the arrival of an accountant
in the department.
Reconciliation between the Evare and Eagle systems has been difficult to coordinate since
the two systems have been in place. Two factors influence this difficulty. First,Evare accounts for
all cash flows on an accrual basis. The Eagle system is,by design and use, a cash-basis accounting
system. There will, therefore, always be inherent timing differences between the balances in each
system. Second, the Eagle system was not originally intended to be a general ledger system. In
addition, there has been a turnover of individuals responsible for performing the work on Eagle's
general ledger. This obviously required training and the learning curve took time. Result: delays
in reconciling.
Since Evare was first installed as an investment tracking and reporting system, there has
always been a second review of every transaction. Original documentation from the investee is used
as the primary input to Evare. It is then passed on to a cashier who verifies the transaction against
the original documentation and then inputs it into the Eagle system. Nevertheless,the Treasurer will
consider the wisdom and efficiency of revising the investment decision, recording, and reporting
processes.
ANDERSON '; P/H TN L P R INE < < Ar, ;nEc-
Board of County Commissioners
Weld County
Page 3
October 22, 2001
PROPERTY TAXES
During property tax testing we found that one town tax levy had been input incorrectly by
the assessor's office,resulting in slightly less property taxes being billed and collected for the town.
We recommend that an employee that does not enter the tax levies review the entries before the tax
bills are prepared.
Management Response:
Our lead public assistant is responsible for entering the tax levies into the computer system.
Then the lead transfer assistant reads through the data that is printed on a hard copy and checks for
any errors. If that person finds any problems, it is returned to the lead public assistant and they will
make the corrections necessary. After that person is finished, it goes back to the lead transfer
assistant to be checked again. If they are satisfied,it then goes to the office coordinator who makes
the final check.
FAIR LIVESTOCK SALE BANK ACCOUNTS
During preparation for the audit, the County Finance Department discovered that the Fair
Board had established two bank accounts for livestock sales. The proceeds from the livestock
auction were deposited into those accounts and distributions to the livestock owners for sale
proceeds were paid from those accounts. The livestock sale activity had not been recorded in the
Fair or County financial statements previously. The bank statements were being mailed to a Fair
Board member and the accounts had not been reconciled. We recommend that all bank statements
reflecting County transactions be mailed to a County address and be reconciled monthly.
Management Response:
The account address has been changed to a County office and will be reconciled.
CASH RECEIPTS
The Building Inspection and Planning and Zoning departments generally make cash deposits
weekly with the Treasurer. We noted certain deposits in excess of$20,000 for Building Inspection
and over $30,000 for Planning and Zoning. To reduce the risk of theft or mishandling, we
recommend more frequent deposits.
Also,we noted that cashiers in the Motor Vehicle department can log into the receipt system
under any cash drawer number. We recommend determining if this access could be limited only to
that individual's cash drawer number.
It appears that the Motor Vehicle change fund is kept in an unlocked file cabinet during
business hours. We recommend this money be placed in a locked location during the day.
ANDERSON & WHI I NEu ; • P A c, tt Bu,, Nr,it Aov�� ms
Board of County Commissioners
Weld County
Page 4
October 22, 2001
Management Response:
When necessary, the Department will conduct semi-weekly deposits, thereby ensuring
deposits less than $20,000.
As of September, 2001, limited access has been implemented.
As of September, 2001, the Motor Vehicle change fund has been locked in the vault. The
majority of the cash fund is locked in the vault and a mini-change bank was created to be kept in a
locked file cabinet in the accounting area.
We appreciate the cooperation and assistance of County personnel during the audit. We are
available to discuss these comments and recommendations in further detail at your convenience.
Sincerely,
A&W:meh
INDFPSCN sc, VNH I ,a Q�, i .t Ar, muk,
Hello