Fayette audit leads to changes 09.15.2010

Posted in 2010 September

By DAVID GREEN

Fayette’s semiannual financial audit listed a few faults with the accounting practices used by the village which will lead to some changes in procedure.

The state audit covered financial statements ending Dec. 31, 2008, and Dec. 31, 2009.

Two findings are classified as a “material weakness,” meaning that a deficiency in internal control might allow for the misstatement of the village’s finances.

The first finding covered two problems: the failure to establish separate funds for loan and grant money received in both years, totaling $220,000; and failure to establish a separate fund for an American Recovery and Reinvestment Act grant of $9,990, as required by federal law.

In the future, village fiscal officer Lisa Zuver will  establish separate fund lines.

The auditor also faulted the village for failing to supply adequate documentation of park board revenue.

In response, the village will use a donation form, with all donations receiving village council approval.

Registration forms will be used for summer ball and other programs to provide documentation of fees paid.

Modifications were made to the concession stand inventory sheet, as recommended by the assistant auditor working for the state.

Numbered tickets were used for the Music Fest last month for reconciliation with the admission money collection. Finally, park deposits will be reconciled monthly with the park director and utility administrator.

Two findings were categorized as showing “significant deficiency”—less severe than material weakness but still meriting attention.

In 2009, park levy funds totaling $3,997 were recorded in the general fund rather than the park fund. This was done in error, Zuver said.

Also in 2009, income tax receipts and the amount listed in the accounting system varied by $3,937. No determination could be found to explain the difference.

In the future, better documentation between the tax administrator and the village fiscal officer is planned, along with monthly reconciliation.

Another finding addressed the need for a purchase order before an expense is made in order to certify that sufficient funds are present to cover the cost.

Zuver said a “then and now” purchase order—as permitted by the state—would be used that certifies when an order was placed (“then”) and when the fiscal officer completes certification (“now”).

Village council has 30 days from receipt of the order to approve payment. Amounts less than $3,000 may be paid by the fiscal officer without a resolution or ordinance upon completion of the “then and now” certificate.

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