Res 1989-033 - Laserfiche WebLink

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The following suggestions result from the above mentioned study and evalua- tion. If implemented, we believe they will enhance the City's system of internal accounting control. PROTECTIOB OF ASSETS Cash Procedures Adequate cash controls are vital to safeguarding of the City's assets. Due to the nature of the asset and volume of cash activity, inadequate controls could result in exposure to loss of City funds, as well as misstatement of cash activity in the general ledger. The City presently has general ledger cash accounts for payroll and accounts payable which represent more than one bank account. The City should estab- lish separate general ledger accounts for each bank account. This would facili tate and simplify the reconciliation process between bank statements and the general ledger. Furthermore, City bank account reconciliations which are prepared by Lower Colorado River Authority (LCRA) employees are not currently reviewed by responsible City personnel. Review of these reconciliations is vital, not only to help protect City. liquid assets, but also to assure that the reconciliations are being performed properly and timely, so that information as recorded is accurate. All significant bank account reconciliations prepared by LCRA should be reviewed and ini tialled by responsible personnel within the City's Finance department on a monthly basis. Not only would this help assure that the reconciliations are performed properly and timely, with all significant reconciling items being investigated and resolved, but it would also help safeguard City assets by verifying accuracy of the reconciliations, as well as demonstrating that documents prepared by LCRA employees are being reviewed by City officials. Additionally, during cash disbursements testwork, it was noted that the City also did not have a receiving report for two of the expenditures tested. Whenever applicable,. a receiving report should be required before an invoice is paid. This would ensure that the goods have been received and inspected before a cash disbursement is made. If the above comments are implemented, not only will the likelihood of error or loss be reduced, but activity as recorded by the City will be more timely and accurate. Establish Records and Controls for General Fixed Assets Sound financial administration in safeguarding the City's investment in fixed assets is of great importance in the exercise of stewardship responsibili- ties. These responsibilities can be effectively discharged only through adequate fixed assets accounting. The City's fixed asset records have not been updated in several years. Such an undertaking is required to realize several benefits: 2