Accountant Bill Glazner recommended changes Tuesday to correct internal control and compliance issues found in the City of Hillsboro’s annual audit.
“We’ve identified one material weakness in that the accounts payable system is not hooked into financial statements,” said Glazner, a certified public accountant with Adams, Brown, and Ball. “There are also two significant deficiencies that relate to segregation of duties.”
The deficiencies noted by Glazner included lack of segregation of duties with limited personnel in the city office.
“We need to create a situation where duties can be broken up so the same person isn’t receiving, recording, and depositing the same money,” Glazner said.
With the small size of the city’s staff, it is difficult to fully separate those duties.
Glazner also noted that current staff in the city office is not qualified to do financial statement drafting. Larger cities could afford to hire someone specifically trained for an ever-changing drafting position, but such a position was not likely feasible for a city the size of Hillsboro.
Following procedures prescribed by Kansas Municipal Audit Guide, Glazner pointed out other deficiencies in the way the city recorded operations for the year 2011. Problem areas he noted included department heads not understanding dispersement policies, employee access to master password lists, a police dog slush account, the assistant clerk’s authority to manage delinquent utility accounts, no written policy for mandatory employee vacation for one consecutive week each year, no formal agreement for golf course operations, bill payment cancellations in the library expenditures department, and need for a written policy for disposition of capital assets in the recreation department.
Ironically, at the end of Glazner’s budget review, Mayor Delores Dalke noted that many of the same issues were raised last year after the city’s 2010-budget review.
“What I want to know,” Dalke said, “is do we have these same issues before us again because we haven’t done anything about them since last year, or is it just the timing late in the year that we can’t get the changes made?”
Glazner reminded council members that his findings were only recommendations and not requirements.
“We can tell you how we would like for you to do things,” he said. “But, because of independence issues, I really cannot offer consultation on how to change.”
Glazner said some changes take time to develop; others could be corrected with a simple order issue, council member vote, and city enforcement.
Council member Bob Watson said he would like to see the council revisit the issues noted in the audit and work to make changes needed.
“We could hold a special meeting, or if we would just touch on a few each meeting we could accomplish the needed changes,” he said.
In other business:
- The council approved a liquor sales license renewal for R & B Liquor.
- Dalke and City Administrator Larry Paine were elected voting delegates to the League of Kansas Municipalities annual meeting next month. Watson and council member Shelby Dirks volunteered to serve as alternates.
- Council member Byron McCarty and Paine discussed issues related to city sidewalks that are part of the new Walking School Bus plan. Dogs in front yards, crosswalk improvements, and shrubbery blocking walking paths might require ordinance changes.