Notice of audit for the City of Gettysburg

NOTICE OF AUDIT
OF THE FISCAL AFFAIRS OF THE
CITY OF GETTYSBURG
Notice is hereby given that the records and books of account of the City of Gettysburg, South Dakota have been audited by Kohlman, Bierschbach & Anderson, LLP, Certified Public Accountants of Miller, South Dakota for the two years ended December 31, 2016. A detailed report thereon is filed with the City of Gettysburg and the Department of Legislative Audit in Pierre, South Dakota for public inspection.
The following findings and recommendations referred to in the report are hereby listed in accordance with the provisions of SDCL 4-11-12.
CURRENT AUDIT FINDINGS
AND RECOMMENDATIONS
Finding:
A material weakness was reported for a lack of segregation of duties for cash, revenues including federal revenues, and equity, which could result in errors not being found in a timely manner. It is not known how long this comment has been made.
Recommendation:
The City is aware of this problem and is attempting to provide compensating controls wherever and whenever possible and practical.
Management’s Response:
William Wuttke is the contact person responsible for the corrective action plan for this comment. He stated, “We feel that this is a small town and would not be feasible to hire another person besides the Finance Officer and Deputy Finance Officer for segregation of duties. The City is aware of this problem and we do try and protect the City by having the Finance Officer open all checks and then gives them to the Deputy Finance Officer to record. For expenditures, the Deputy Finance Officer opens all bills and then gives them to the Finance Officer to issue checks. The Council reviews all expenditures and does sign the documentation for each expenditure and the Council does receive a cash balance each month with quarterly updates on revenues and expenditures.”
Finding:
The City does not have an internal control system designed to provide for the preparation of the annual financial statements including required footnotes and disclosures, in accordance with Other Comprehensive Basis of Accounting Modified Cash Basis, being audited. As auditors, we were requested to draft the financial statements and accompanying notes to the financial statements.
Recommendation:
This circumstance is not unusual in an organization of this size. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations.
Management’s Response:
William Wuttke is the contact person responsible for the corrective action plan for this comment. He stated, “The Council tries to be involved at every level and does oversee the financial reports.”
Finding:
During the course of our engagement, we proposed material audit adjustments that would not have been identified as a result of the City’s existing internal controls, and therefore could have resulted in a material misstatement of the City’s financial statements.
Recommendation:
This circumstance is not unusual in an organization of this size. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations.
Management’s Response:
William Wuttke is the contact person responsible for the corrective action plan for this comment. He stated, “The Council tries to be involved at every level and does oversee the financial reports.”
Finding:
The City did not properly bid out storm sewer culverts that were purchased, road resurfacing materials that were purchased in both years, and a sewer relining project, all of which were required to be bid.
Recommendation:
We recommend that the City properly bid all items that are required to be bid before they are purchased.
Management’s Response:
William Wuttke is the contact person for this corrective action plan for this comment. He stated, “Now that we are aware of this, we will require proper bids for all future street plans.”
MARTIN L. GUINDON, CPA,
AUDITOR GENERAL
DEPARTMENT OF
LEGISLATIVE AUDIT
Published twice at the total approximate cost of $95.94
-101917-102617

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