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CPI`Y OP ST. ANTHONY, MINNI.SOTA <br />SCHEDULE OF FINDINGS AND QUESTIONED COSTS <br />For The Year Ended December 31, 2006 <br />2006-3 Lack of Journal Entry Approval <br />Criteria: There is a lack of formal approval process for journal entries. <br />Condition: There is no documented approval when journal entries are madc to the system. <br />Cause: The City has not established a formal approval process. <br />Effect: In the current auditing environment, journal entry approval has taken on a heightened <br />sense of awareness since fraud can frequently be covered up by journal entry, especially those <br />involving wire transfers. The lack of journal entry approval subjects the City to a higher risk <br />that errors or fraud could occur and not be detected in a timely manner. <br />Recommendation: We recommend all journal entries have documented approval along with <br />supporting documentation. <br />Views of Responsible Officials and Corrective Action Plan: The City will correct this going <br />forward by documenting the approval of all journal entries. Journal entries and the <br />supporting documentation will be reviewed by an alternate person in finance who did not <br />prepare the initial entry. After their approval, the journal entry will be processed into the <br />accounting records. <br />