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Draft Effingham Audit

Draft Effingham Audit

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Published by savannahnow.com
Draft 2012 financial audit for Effingham County.
Draft 2012 financial audit for Effingham County.

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Published by: savannahnow.com on May 29, 2013
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08/21/2013

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EFFINGHAMCOUNTY,GEORGIA
ScheduleofFindingsandResponses
FortheYearEndedJune
30,2012
Page1
of35
Internal
Control
Findings
2012-01
BankBalances
and
Reconciliations
Condition:
ThebankbalanceandtheresultingbankreconciliationsatJune30,2012includedand
erroneous
amountfor
sales
tax
receivable.
Criteria:
Internalcontrolsshouldbeinplacetodeterminethatthestatedbankbalancesare
properlystated.
Cause
of
Condition:
Intheyearend
close-out
procedures
an
accrual
was
made
for
sales
tax
receivables
whichwasrecorded
in
the
cash
account
instead
of
the
"accounts
receivable"account.
Onthebankreconciliationtheamountwasincludedasareconcilingitemin"depositsintransit".
Thereview
of
thebankreconciliationsbythefinancedirectordidnotdetectthismisstatement.
Effect
of
condition:
The
failure
to
detect
a
significant
improper
reconciling
itemcould
lead
to
significantly
misstatedfinancial
statements.
The
effect
of
this
condition
was
a
overstatement
of
cashandanunderstatement
of
salestaxreceivablebyasignificantamount.Totalassetswerenot
misstated,
notwere
revenues.
Recommendation:
Establishprocedures
to
ensure
that
bank
reconciliationsare
reviewed
and
approved
atthe
appropriate
level
to
determine
that
all
reconciling
itemsare
appropriate.
Managementresponse:
Workshop 052820135/27/20131 of 35
 
EFFINGHAMCOUNTY,GEORGIA
Schedule
of
Findings
and
Responses
FortheYearEndedJune
30,2012
Page2
of35
2012-02Review
of
closingentries
Condition:
Severalclosingjournalentriesrelatedtograntrevenueanddeferredrevenuewere
recordedincorrectly,suchasdeferredgrantrevenuerecordedbackwardsandrecordedtothewrong
accounts.
Criteria:
All
journalentriesshouldbeadequatelydocumentedandproperlyreviewedtodetermine
clericalaccuracyandproperrecording.
Cause
of
Condition:
Itappearsthe,journalentrieswere
prepared
bystaffandnotadequatelyreviewedforaccuracyandcompleteness.Thedocumentationtosupporttheentrywasadequate,
however,therecording
of
theentrieswasinerror.
Effect
of
condition:
The
failure
to
properly
reviewclosing
entries
anddeterminecompletenessandaccuracycouldleadtomisstated
financial
statementsandthepotentialtocover
fraud.
Recommendation:
EnforcetheCounty'spolicyforareview
of
alljournalentries.
Managementresponse:
Workshop 052820135/27/20132 of 35
 
EFFINGHAM
COUNTY,GEORGIA
Schedule
of
FindingsandResponses
For
theYear
EndedJune
30,2012
Page3
of
35
2012-03FinancialInstitutionSignatureCards
Condition:
TheCountyAdministratorwas
included
onthe
signature
cards
for
two
accounts,
the
SeniorCitizensActivities
Program
andtheLandfill
account,
whichwereestablishedinthe
current
fiscalyear.
It
does
not
appear
thatthe
inclusion
ofthe
CountyAdministrator
on
these
signature
cardswasknownorapprovedbytheBoard
of
Commissioners.
Criteria:
Internal
controlsshould
bein
placethatrequire
all
changes
in
bankingrelationships
and
authorizationsonaccountsbe
approved
bythe
Board
of
Commissioners.
Cause
of
Condition:
It
has
been
the
County's
standard
operating
procedures
for
the
Board
of
Commissioners
to
approve
newor
closed
accounts
as
wellasto
approvethose
persons
authorized
to
sign
onthe
County's
bank
accounts.
The
acquiring
ofthe
signatures
onthe
signature
cardswas
performed
bythe
County
Clerk
in
hernormal
duties.
It
appears
the
CountyAdministrator's
name
wasaddedtothetwoaccountswithouttheknowledgeor
approval
of
the
Board
of
Commissioners.
Effect
of
condition:
Theinclusion
of
unauthorized
persons
on
signature
cards
couldresult
in
inappropriate
and
unauthorized
transactions
occurring.
Additionally,
in
this
particular
situation,there
appears
tobea
conflict
of
interest
due
to
the
spousal
relationship
between
the
County
AdministratorandtheCountyClerk.
Recommendation:
Enforce
the
County's
policy
requiring
all
authorized
signatures
tobe
approved
by
the
Board
of
Commissioners.Additionally,
periodically
require
thereview
of
the
signature
cards
by
an
independent
person
for
adherence
tothe
policy.
Managementresponse:
Workshop 052820135/27/20133 of 35

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