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Independent auditor flags segregation-of-duties weakness but issues unqualified modified-cash-basis opinion
Summary
The town's independent auditor told the board the modified-cash-basis financial statements are materially correct but noted a material internal-control weakness: insufficient segregation of duties in the town office; the auditor suggested larger staffing levels to improve controls.
The town's independent auditor presented the annual audit and said the modified-cash-basis financial statements were materially correct "in all material respects" while noting the town does not use generally accepted accounting principles.
The auditor warned the board that the town's internal controls show a material weakness. "I consider the deficiency described in the company's schedule to be a material weakness," the auditor said, pointing to limited segregation of duties in the office and noting that "typically, you'd have to have about 4 employees to segregate all those duties."
The auditor reviewed footnotes showing capital-asset additions and deletions, grants and an in-kind-donations schedule, and said the reports now include greater detail about donors and donated services. He offered to answer questions and said audits were current.
Board members discussed the auditor's recommendation and asked follow-up questions about which schedules and footnotes required more detail. The auditor said he would provide additional copies and remain available for questions.
No formal board action was recorded in the provided segments on the audit report; the auditor invited board members to call with questions after the meeting.
