Audit: City Of Edina In Good Financial Health
Audit: City Of Edina In Good Financial Health
By Echo Menges
A representative of Wade Stables P.C., Michael Mudd, attended the Edina City Council Meeting held Monday, June 13, 2011 to present the council with the cities 2010 Audit Report. Mudd presented the council with a 37 page document that analyzed and outlined the city’s 2010 financial statements. Mudd went through the document with the council section by section ending with final page, the section that listed the auditors findings and “significant deficiencies” they found.
There were two deficiencies listed on the report.
First, listed as “Finding 2010-01” titled “Timeliness of Deposits.” The audit reported as a condition of the finding that, “During the year there was a lack of timely deposits made by the collector.” The report went on to say, “Deposits not made on a regular basis increases the risk of fraud or misstatement in the organization. Deposits not made in a timely manner may result in receipts recorded in the wrong accounting period and money and deposits not made in a timely manner increases the risk of fraud.”
The auditors recommendation was, “Deposits should be deposited on a daily basis and reviewed by someone other than the person making the deposit. Any issues with delays in deposits need to be addressed in a timely manner to avoid misplaced receipts and to reduce the risk of fraud.”
Also in the report a response from the city was given. The city responded, “The lack of timely deposits has been discussed extensively by the City Council. Deposits are currently being made everyday.”
Concerning this matter the City Clerk, Margret Gibson, said the City of Edina’s past audits have also had timely deposit deficiencies, but since the new City Billing Clerk/Collector has come onboard there has been a deposit made every day.
“We expect it to be the last audit with a timely deposit deficiency.” Said Gibson.
The second and last deficiency was listed as, “Finding 2010-02” and titled, “Segregation of Duties.” Such a deficiency makes it on to just about every audit that’s ever been done here in Knox County because the small size of the office staff.
The report reads, “A lack of segregation of duties was noted during the engagement. Segregation of duties is normally difficult to accomplish within a small organization, but management should be ever mindful of areas that can easily be improved.”
The city’s response was, “The lack of segregation of duties has been evaluated and we have determined that it is not financially feasible to segregate all duties. The mail will now be opened by an employee that is not responsible for accounting. We will continue to be attentive to the situation.”
Mudd concluded his presentation by saying the City of Edina is in financial good health. He pointed out that the city is operating without debt and commended the council and City Treasurer, Peggy Collinge, for doing a good job putting together and safeguarding the city’s annual budget along with building a good reserve of city funds pointing out how fortunate they are not to be in any kind of debt. Mudd also mentioned that many cities have problems loosing money on city water because they don’t raise the rates as it is needed. In Edina the water rates go up in small portions as the cost of providing city water, sewer and associated services rise instead of waiting too long, loosing money and passing large increases on to their customers. Edina water customers see smaller, more manageable increases over time.
Citizens may view the full 37 page 2010 independent audit at the Edina City Hall.
