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Internal audit finds Santa Fe—s month-end close sound but under-documented
Summary
A Baker Tilly internal audit presented to the Santa Fe Finance Committee found the city—s month- and year-end close processes are functioning but recommended formal written policies, routine manager review documentation for reconciliations, and better recordkeeping for a technology disaster-recovery tabletop exercise.
The Santa Fe Finance Committee received an internal-audit report on Nov. 10 finding that the city—s month- and year-end close processes work in practice but lack complete documentation.
Director Emily Osterholm introduced the review and said the audit, performed by Baker Tilly (which merged with Moss Adams over the summer), focused on process and procedure rather than the external audit—s emphasis on financial statements, controls and federal compliance. "The main issue that came up was documentation," she said, citing a need for written policies and formal documentation of review steps.
Andrew Kumelas, senior manager at Baker Tilly, said testers found the processes in place but identified three low-risk findings: (1) the city has not yet developed written policies and procedures for month- and year-end close; (2) two of about 10–12 reconciliations tested lacked formal manager or supervisor review documentation (signature or email approval); and (3) documentation could not be produced to show a technology disaster-recovery tabletop exercise occurred. "For the most part, the actual processes that we observed, we didn—t identify any issues with those," Kumelas said. "It—s more just documenting them via policies and procedures."
Committee members praised the audit and Osterholm said the audit committee reviewed the report Oct. 23 and recommended minor wording changes before forwarding it to finance. She said the findings and Baker Tilly—s recommendations provide a roadmap for documenting the close process and that staff will present the report to the full governing body on Wednesday so all members have the same information.
The report included commendations for the finance team—s cooperation and a recommendation to codify review steps and maintain documentation of technology recovery exercises to reduce risk if staff change or leave. No formal votes on policy changes were taken; the committee approved the meeting agenda and consent calendar earlier in the session and will consider any policy changes after staff develops written procedures.
