An auditor from Kelley Galloway & Company was on hand at last Tuesday's Olive Hill Council meeting to present the audit findings for the 2011-2012 fiscal year.
Lori F. Dearfield, the CPA who performed the audit, outlined several issues and discrepancies found in her examination and presented recommendations for the Council to consider in order to rectify the errors.
Chief among the errors was that the city's expenditures exceeded the amounts that were appropriated in the budget for the fiscal year and that the budget had not been amended to reflect these changes, both of which are required by state law.
The firm recommended that the city implement “a strict monitoring process whereby the budget versus actual financial results are amended on a timely basis” to prevent such an occurrence from happening in the future.
Also, the firm found that customer deposits from the utility sub-ledger had not been properly reconciled with the city's general ledger for the utility fund, meaning approximately $3,567 in customer deposit funds were unaccounted for during the last fiscal year.
The firm recommended that the city “reconcile the customer deposit general ledger account to the utility bill sub-ledger to ensure proper balances are recorded” to correct this error.
Dearfield also noted that, even though the utility cashier change drawers are counted down every day, there currently exists no log to document any shortages or overages that are found.
She recommended that adjustments to the general ledger be made when a discrepancy is found in a utility cashier's drawer.
The firm also stated that “payroll time cards often lack documentation to show they were properly received and reviewed” and recommended that adequate controls be put in place to ensure that time cards receive the proper review and approval.
Dearfield was quick to point out that the budget overages, undocumented customer deposit funds, and cash drawer issues all fall within acceptable limits for audit guidelines, calling the discrepancies “immaterial” when pressed by Council member Glenn Meade on the importance of such items.
All of Olive Hill's fund accounts are audited by an external auditor party on a yearly basis as required under Kentucky law.
Joe Lewis can be reached at firstname.lastname@example.org or by telephone at 286-4201.