Article by W. Clay Crook-
An audit issued by the Comptroller General of the United States for the Town of Sardis, Tennessee, for the year which ended June 30, 2020, and issued their report in December 2020. There were three primary findings, two which were found in previous years that have been moving forward for correction.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the town’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements.
We identified certain deficiencies in internal control that we consider to be material weaknesses. The third involved a timelier issuance of a budget amendment.
2020-001 Segregation of Duties (original finding 1999-001)
The operating structure of the Town does not allow for adequate segregation of duties between persons with access to assets and those responsible for reconciling records and recording transactions. The City Recorder is responsible for billing, collecting, recording, and reconciling the general ledger. Generally accepted accounting principles require that accounting functions be adequately segregated to ensure that the internal controls are effective.
The audit recommended that adequate systems of internal control require segregation between individuals with access to assets from those who maintain accounting controls over the assets. They also recommended that the board should review and document its review of each month’s transactions and reconciliations in the event that additional personnel are not hired.
The town of Sardis agreed with the recommendation and established that the board will review the monthly transactions incurred by the town, as well as…
For complete coverage, see the January 6th edition of The Lexington Progress.