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Board accepts fiscal‑year audit, management letter recommends controls fixes
Summary
The Board of Finance accepted the fiscal‑year audit and heard the auditor’s management letter recommending improved controls over journal entries, a formal closing schedule, fixed‑asset accounting improvements and clarifying ordinance language on pension discount rate; the board voted unanimously to recommend council adoption of the audit.
The Board of Finance unanimously accepted the fiscal‑year audit (fiscal year 2024) and reviewed the auditor’s management letter, which included three recommendations to strengthen financial controls.
The auditor (firm identified in materials as Arkham, now acquired by CBS) recommended improved controls over journal entries and adherence to a formal year‑end closing schedule, better fixed‑asset accounting (including exploring software the city already owns), and ordinance language clarifications to resolve a mismatch between current ordinance language on pension discount rates and collective bargaining agreements.
City staff said some of the transactions that contributed to the recommendations were material (generally considered to be over $1 million, in context) and involved airport AIP transactions, ARPA accounting, and fixed‑asset records. Staff outlined steps: increased project management across funds, preliminary year‑end work beginning earlier, hiring additional personnel in critical roles, and working with IT to implement fixed‑asset accounting in existing software.
On IT controls, staff said the city will formalize a ticketing process requiring department heads to request permission changes in the financial system to ensure an auditable record. On the pension discount rate, staff said they plan to propose ordinance language that allows the pension discount rate to follow collective bargaining agreements (or similar language) so audit recommendations on the mismatch are addressed.
Motion and vote: A board member moved to recommend the City Council adopt the attached audit package for FY24; the motion was seconded and carried unanimously.
Board members thanked staff for the audit work and encouraged follow‑through on the management letter recommendations.
