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47 <br />CITY OF ST. ANTHONY, MINNESOTA <br />SCHEDULE OF FINDINGS AND QUESTIONED COSTS <br />For The Year Ended December 31, 2006 <br />2006-9 Financial Statement Misstatements <br />Criteria: SAS 112 specifies that a misstatement of any magnitude that could occur and not be <br />detected by the City's controls be considered a significant deficiency in internal control. <br />Condition: During the course of our audit, audit staff prepared journal entries to correct <br />beginning account balances, transfers, depreciation expense, Retainage payables, prior period <br />adjustments, capital asset additions, sales tax expense, bond proceeding and bonding costs, <br />pay-as-you-go TIF activity, amortization expense, escrow activity, grants receivable and <br />interest receivable. <br />In our viewpoint, the guidance provided by SAS 112 regarding financial statement <br />misstatements combined with the complexity of governmental accounting will result. in most <br />local governments receiving a finding in this regard. <br />Cause: The City has not established procedures for review of year end closing entries nor <br />established procedures to review trial balance account balances for accuracy. <br />Effect: By not having such controls, there is an increased risk that financial statement <br />misstatements may occur. <br />Recommendation: We recommend that the City put procedures in place to ensure that all <br />activity reported in the trial balance is reviewed for accuracy. <br />Views of Responsible Officials and Corrective Action Plan: The City is in the process of <br />correcting accounting procedures that will ensure that previous audit staff prepared journal <br />entries will be made and posted into the system by City staff prior to the audit. start date. The <br />result will be a trial balance that is more accurate and can be tested for accuracy. <br />