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HomeMy WebLinkAboutTR-48-84 CORPORATION OF THE TOWN OF NEWCASTLE TREASURY DEPARTMENT K. CAMPBELL, G.A.,TREASURER 40 TEMPERANCE STREET TEL.(416) 623-3379 BOWMANVILLE, ONTARIO L1C 3A6 REPORT TO THE GENERAL PURPOSE AND ADMINISTRATION COMMITTEE MEETING OF JUNE 4th 1984 REPORT NO. : TR-48-84 SUBJECT: 1983 COMMENTS ON INTERNAL CONTROL AND ACCOUNTING PROCEDURES RECOMMENDATION: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council that this report be receive for information. BACKGROUND AND COMMENT: Following are the comments contained within the 1983 post audit letter as presented by Deloitte, Hasldns & Sells and staff's response to those comments. All of the comments are fairly minor in nature and reflect the continually improving internal controls within the Town's financial operations. Purchases Comment We noted at least one incidence where a purchase order receiving copy was not signed upon receipt of the related goods. This is contrary to existing documented policy and, therefore, we recommend that in future all receiving copies of purchase orders reflect the signature of the individual J. who received the goods. i ! r - 2 - TR-48-84 BACKGROUND AND COMMENT: (continued) Purchases (continued) Response All staff are aware of the purchasing procedures as they relate to this matter. The staff responsible for the purchasing function and the accounts payable function will be more vigilent in their review of the purchasing documents to help ensure that the appropriate procedures are followed as established in the existing policy. Cheque Disbursements Comment We suggested in the 1982 management letter that controls be implemented over the keys which control the operation of the cheque signing equipment. We concur with actions taken upon our recommendations and suggest that further control could be gained by keeping the separated drawers in which the keys are now stored locked at all times. Response Staff recognize the value of the maintenance of the cheque signing keys in locked drawers, but do not intend to implement this recommendation. The necessary keys to operate the signer are kept in the switchboard operator's desk and the desk of the mayor's secretary. It would be highly unusual for other staff to be in the drawers of those particular employees' desks and this activity would surely be noticed by other staff. In addition, access to the cheque signer head, which is kept in a locked cabinet in the vault, is limited to two other employers being the Treasurer. or Deputy Treasurer and the Accounts Payable Clerk. - 3 - TR-48-84 BACKGROUND AND COMMENT: (continued) Cheque Disbursements (continued) Response (continued) Without the cheque signer head and all necessary keys the operation of cheque signer cannot proceed, so I see little risk exposure in this instance. Accounts Payable Vouchers Comment As commented upon in the prior year, we have again noted several accounts payable vouchers on which appropriate approval signatures, cheque numbers or the signature of the person responsible for checking the appropriate additions were not evident. Again we recommend that every voucher reflect all appropriate signatures. Current policy requires that the person responsible for mailing signed cheques be someone independent of the processing and approval of accounts payable documents. Currently this procedure is not in effect and we suggest that the required procedures be adhered to. Response All staff are aware of the appropriate approval procedures for accounts payable vouchers, but these will be reinforced again. The staff processing accounts payable to the computer system will, again, be instructed return all inappropriately approved vouchers to the originating departmetn for approval. - 4 - T R-48-84 BACKGROUND AND COMMENT: (continued) Accounts Payable Vouchers (continued) Response (continued) With respect to the mailing of signed cheques which is presently accomplished by the Accounts Payable Clerk, this procedure can not be modified by using Treasury Department staff. With the size of staff in the Treasury Department, at this time, there is no individual who is not involved in the processing and approval of accounts payable. This mailing function would have to be accomodated in another department and because it does not raise serious concerns will not be persued at this time. General Matters Fixed Asset Ledger Comment We reiterate our prior year's suggestion, that in order to establish an adequate degree of control over fixed assets, a fixed asset ledger be implemented. Response This item has not had a high priority within the Treasury Department. We do have a list of major moveable assets (trucks, graders,etc) for insurance purposes but other capital is not listed anywhere. This task falls generally under the purchasing function and it is hoped that a start on this task can be made in mid 1984. 5 - TR-48-84 BACKGROUND AND COMMENT: (continued) General Matters (continued) Subdivision Agreements Comment In prior years we recommended that an accounting system be established to monitor timely collection and control over outstanding subdivision levies. We understand that management is currently in the process of setting up such a system. Response A method of subdivision control related to the financial obligations is in process, at this time. The majority of the basic work related to existing agreements has been completed, but has yet, to be reviewed for accuracy, completeness, etc. Over the summer months the Deputy-Treasurer is to complete this records system and implement a monthly review to update the records for any changes. Once fully in place, this records system will be of substantial benefit to the Treasury, Planning and Public Works Departments, all of which must deal regularly with the various subdivision and site plan agreements. We are all looking forward to this improvement, as it will ease the workload involved with the various agreements. Financial Statement Preparation Comment The 1983 financial statements of the Town were again prepared by the external audit staff. - 6 - TR-48-84 BACKGROUND AND COMMENT: (continued) General Matters (continued) Financial Statement Preparation (continued) Comment (continued) We recommend that in future the treasury staff of the Town of Newcastle prepare these statements prior to the completion of the final audit. This situation would reduce audit field staff time, result in a more efficient audit, and help to keep audit/accounting fees to a minimum. We suggest that the deputy-treasurer be given the opportunity to complete an interim set of financial statemnets at July 31st 1984 under adequate supervision and guidance. Response This recommedation will be implemented with Committee's concurrence. Staff in the Treasury Department have been advised of the exercise and the necessary liason with Deloitte, Haskins & Sells will take place in mid-July to set this exercise in motion. Once completed by mid to late September Committee will be advised of the results of the exercise and their effect on the completion of the 1984 year end audit. Respectfully yours, Kathryn A. Campbell, C.A., B.Comm. , Treasurer. *gf