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<br /> - 3 - <br /> BUDGET AMENDMENTS. At present, budg et amendments are <br /> processed each time a line item within a department exceeds the <br /> appropriation. The City Charter was rev iewed with the acting <br /> Director of Finance and the City's attorney to determine if it <br /> required that line item amendments within a department receive <br /> Council approval. We recommend that the staff consider <br /> drafting the required resolutions allowing such departmental <br /> line item adjustments, excl ud ing personnel costs, to be <br /> approved by the City Manager in accordance with the City <br /> Charter. <br /> INVENTORY. In order to adequately control inventories <br /> of fuel and maintenance supplies, periodic physical counts <br /> should be cond ucted and reconciled to the accounting record s. <br /> Al though a physical count of fuel inventory is be i ng taken <br /> monthly, the accounting records are not being updated. No <br /> physical count of the materials inventory was cond ucted during <br /> the year. Strong controls over inventory can be very benefi- <br /> cial in highlighting obsolete or overstocked inventory. We <br /> recommend that policies on physical inventories be established <br /> and adherred to. <br /> FIXED ASSETS. The City has continued to improve the <br /> system of accounting and controlling General Fixed Assets. We <br /> do recommend, however, that subsidiary records be updated <br /> promptly, preferably on a monthly basis, and reconciled to the <br /> accounting records. <br /> PAYROLL DISTRIBUTION. The current system of payroll <br /> distribution within the Police Department does not provide <br /> adequate controls for the safeguarding of checks. Due to the <br /> various shifts worked by pol ice officers, payroll checks are <br /> all placed in a tray in the dispatcher's office. The checks, <br /> which are not in envelopes, are therefore accessible by anyone <br /> who enters the dispatcher's office. <br /> We recommend that the Police Department implement a <br /> payroll distribution system similar to the system currently in <br /> use by the Finance Department. That is, specific ind i v id ual s <br /> should be responsible for all checks. <br /> Harold V. Simpson & Company, Certified Public Accountants, Austin, Texas <br />