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CITY OF GREENSBORO, NORTH CAROLINA

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS

Year Ended June 30, 2016

-213-

2015 – 001

Accounts Payable

Audit Finding: The City has a process whereby the Treasury Division reviews invoices over a certain

dollar threshold to determine whether they should be recorded as liabilities at year-end. Payments that

are associated with a Purchase Order are not typically manually reviewed for potential liability accrual at

year-end, but rather a systematic control is relied on by the Treasury Division staff to capture payment

activity in the correct accounting year. For certain of the detected errors, receiving information was not

entered into the financial system at time of receipt of goods, causing the systematic control to not function

as intended. During our search for unrecorded liabilities, we found several expenditures that should have

been recorded as a liability on June 30, 2015.

Corrective Action Taken: Management implemented additional training in proper use of the purchasing

system, in particular relating to receiving of goods, to key staff in the operating departments. In addition,

new reports of Purchase Order payment activity during the cutoff period are generated for review.

Training was also given to department level staff on proper review and coding of invoices to further help

capture payment activity in the correct period.

2015 – 002

Utility Receivables

Audit Finding: The City develops a separate estimate of unbilled water usage for all of its billing cycles in

the Water Resources Fund. The total of all billing cycle estimates are combined to calculate the year-end

unbilled water receivable. The City has a process whereby someone other than the person who prepares

the unbilled water usage estimate reviews it for accuracy. This calculation is prepared regularly and does

not have a history of errors in it. We found one cycle that was recorded twice in the roll-up of the final

unbilled water receivable. At the time the year-end receivables were reconciled, certain duties were

reassigned to accommodate changes in staffing. The person currently preparing the reconciliation was

not familiar with the year-end unbilled calculation performed by another in order to avoid duplication of

recorded amounts.

Corrective Action Taken: A checklist of required year-end journal entries is maintained. A step was

added to the list to search for duplicate entries to aid the reviewer and other staff with the accuracy of

recorded utility receivables and revenues. The reviewer also performed tests of reasonableness on

recorded balances and make additional inquiries, as necessary. Additional staff training was also

provided to ensure accurate accounting treatment going forward.