HomeMy WebLinkAboutR-75-0586`damtl'?S
Mtrab
RESOLUTION NO 75-586
A RESOLUTION RECEtV1NO THE ANNUAL POST AUDIT
REPORT PREPARED EY TOU t E, ROSS 4& COMPAiNY
AND AUTMORI2INO TMECITY C1ER1 TO RETAIN SAID
REPORT AS A PUSt tC RECORD 'OR A MINIMUM OP
TEN (10) YEARS.
4
WT1EREAS, Chapter 10.500, Rules of the Auditor 'General,
require municipalities to be subject to an annual post audit
by an independent certified public accountant retained and
paid by the municipality; and
WHEREAS, Chapter 10.510, Subsection 6 requires that
the annual post audit report shall be received by the municipality
at a regular meeting of its' governing body;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF
THE CITY OF MIAMI, FLORIDA:
Section 1. The annual post audit report prepared by
Touche, Ross & Company be, and it is hereby. received by the
municipality.
Section 2. The City Clerk be, and he is hereby,
authorized and directed to retain the aforesaid report as a
public record for a minimum of ten (10) years.
PASSED AND ADOPTED this 12 day of JUNE
1975.
1AURICE 1\, FERRE
Attest:
PREPARED AND APPROVED BY:
Assistant City Attorney
APPROVED AS TO FORM AND CORRECTNESS:
Cohn $, Lloyd
Gam" r�/I
Citytorney
"DOCUMENT INDEX
ITEM N -
MAYOR
H , D. SOUTHERN
City Clerk
"DOCUMENT INDEX
ITEM NO /5
CITY COMMISSKJN
MEETING OF'
JUNi21975
mom f40,24:741'4
I ,„
CH E OSS Pit, CO.
tt t*tit it't, tiut4i t AtcbUktAiiits
tffikt 1'060 '1i1V't-RGAtt "PtA2A
444 Valtktti. ;AvENt't
i3111~ 1v11, 't tiit 1 C A 11111
April 1., 1075
Monorai le Mayor
and City Co niissibners
City of Miami, rlorida
n connection with our examination of the financial state-
menta of The City of Miami, pioriela, for the year ended September 10,
1974, we became aware of weaknesses in internal control and oeerating
procedures both within and outside c., financial area. These weak-
nesses were not of such magnitude that they would significantly affect
the fair presentation of the financal statements taken as a whole.
However, we believe they require management review and evaluation.
Our comments have been discussed with appropriate personnel
and, in some capes, necessary corrective measures may already have
been put into effect.
Since our review of the system of internal control was con-
ducted primarily to enable us to express an opinion on the financial
statements taken as a whole, our review would not necessarily disclose
all weaknesses in the system which may exist.'
Electronic Data Processing:
We are aware that the City is planning for a major data
processing instal'ation, including data processing services which would
be available to the,Fina,v-n Department. We believe that the City is
at a point in its growth where it has become essential to automate its
data processing to the extent practical, and we recommend that planning
to this end be continued. In its system development and equipment selec-
tion ,effort, we urge that the City give'high priority to the needs of
the Finance Department.
At the present time, the data processing equipment in the
Finance Department is card oriented and not capable of meeting the
potential for automated systems requirements in the Finance Department.
We believe that there are a number of applications in finance and re-
lated areas where the City could effecti7.:ly utilize data processing
capabilities. For example, the general ledger and peripheral account-
ing records could be automated. Currently, an excessive amount of time
is expended collating and summarizing information which is posted to
the general ledger. Subsidiary records such as accounts receivable
itdc er§and iikbd ass {fs records "could be mete tfftetit@iy triai'tteirted
by tbP tyttemt. At tht prtsel t imL. detail i9•tfot- iatibrt to aportifig
these aceoutt t is hi iitnal. other applicatiOns that teuid be titt tt`
ively it pletictitcd ate Bash t'tianagetefit. inventory controls attd .,rogrtim
to aetouht rot federal gt-attts
i tttnal ebhttb1J5Ve .Dai.•..a t eessit .,bt ar't rieri't
We made a litited review of the system of internal control
employed ih the data processing area and tinted the folltWing weaknesses e
Programming personnel operate the eottiputer on
regular processing runs.
No program manual exists which sets forth standardized
programming techniques and procedures such as program
documentation, program testing and program changes.
Plow charts are riot a»'ilable for all programs
The file cabinets used for storing programs and pro-
gram cards are not 1c7.ked. These are accessible to
all employees within the department.
5. There are no program run books or logs maintained.
b. Backup programs and program documentation are not
maintained.
7. There is little or no participation by user depart-
ments in review and testing of programs or in verifi-
cation of data processing output.
8. The data processing installation and equipment are
L-t restricted to access by department personnel.
The installation may be entered by all employees
In order to held, achieve adequate control over the data
processing department, it is imperative that these weaknesses in the
system of internal control of the ;ata processing department be
corrected. A good system of internal control helps insure that in-
formation processed is accurate and reliable.
Internal Auditing:
The activities of the internal audit department are limited
almost exclusively to the review of specific transactions within
certain balance sheet and revenue accounts. We believe that the City
would benefit from expansion of their function into all areas of
financial signifirance such as purchasing, inventory control, budgeting.
expenditure control and monthly financial reporting. By expanding the
internal audit department's scope, management should receive the benefit
of a more objective appraisal of the City's performance in these areas.
lh addition, it appe *- 1,:lat the internal audit department
dots not review the financial information r cation prepared by the data
ltt-oetssittq department. At present, the data processing department
is independent, having nb outside challenge, egeept to the extent that
output it reviewed by th- treat departments. We believe that the
functions of the inter is audit department §load include review of
computer applications, documentation of systems and programs, and
internal controls over the data processing department. Effective
implementation of this policy may require additional personnel or
specialised training for current 1...:ra+ittnel as to proper procedures
for review of internal controls for a data processing department.
PetliCiA _ arcc c e.s_ ' Ar al.:
No formal manual for accounting and data processing pro-
cedures currently exists. We recommend that a formal procedures
manual be prepared to document all accounting and data procetai.ng
policies and procedures. This woul 4 help to insure that accounting
policies and procedures are eonsiste.Lcly applied and transition
periods for new personnel would be less difficult.
General_Ledger__and Journal _Entries:
We suggest that a formal chart of accounts be developed.
The chart of accounts should be such that adequate management in-
formation can be derived from the accounting records, but not so
detailed as to be cumbersome.
Grants Management:
•
It appears that increasingly larger amounts of money will
be available in the form of special grants and/or cost reimbursement
programs. The monies received under each program will have to be
accounted for e•^tDarately. We recommend that the City establish a
standardized procedure to account for monies received. This could
be a relatively simple accounting under the present hand posted 'ac-
counting system. When expanded data processing capabilities are
available to the Finance Department, the system could be expanded.
A uniform method of accounting for special grant funds shou].d help
simplify the City's record keeping, and a demonstrated capability to
properly account for funds received under special grants and cost
reimbursement programs, may enhance the City's capabilities in ob-
taining such funds.
Accounts Payable:
To avoid duplicate payment of vendors invoices, we recommend
that both vendor invoices and the voucher copy be cancelled upon payment.
At the present time, purchase orders and vendor invoices are
retained in separate files. We recommend purchase orders be attached
to and filed with vendor invoices to afford easy comparison of prices,
quantities, discounts, etc.
•
tit'O 1
!lsd it Was doted that tlic 'City 'hilt:. oii Book t dit1
p yab is and t1''pcsitS4 #liist+ accounts !Mould bo toviewod ptivi,i(1i
e'al ly and amouttts which are tot vxpoett'd to btk pri id !thoula to
writtensoft if within local restrictions.
To facilitate review of and eontrol over such payaties.
subsidiary lodgers or account analyses should be prepared which
includes the aotail necessary to determine their status.
toe recOMMend that the City institute a voucher register
system for accounts payable. As vendor invoices were received, the
corresponding encumbrance would be reversed and the charge to an
asset or expenditure and a credit to accounts payable would be re-
corded. This procedure would substantially eliminate the time Cori-
suming search for unrecorded payables and encumbrances at year end.
Dash Disbursements
It appears that too many 'mployees have access to and tine
of the check signing machines. We recoinrnend that use of the cheek
signing machines be restricted to one or two !rriployees.
Payroll, Personnel, Employment and Rates Authorizations
We were unable to locate the exemption certificate (Form
W-4) for some employees.
•
The payroll records should be kept current and there should
be adequate documentation for all payroll deductions.
It wa., noted that payroll checks and employee earning re-
cords (Form W-2) were forwarded to department heads for distribution
to employees. To provide greater internal control over payroll,
periodic surprise payroll payoffs should be made by the internal audit
department, and the W-2 forms should be mailed directly to the
employees. In addition, the internal audit department should peri-
odically compare the endorsements on payroll checks to signatures on
W-4 withholding forms to insure that the individual cashing a payroll
check is the same individual who signed the W-4• withholding form._
Receiving Department:
Presently the City does not have a centralized receiving
department Orders for goods are placed >.y the Purchasing Depart-
ment and the goods are received by the respective user departments.
Substantially all goods received by the City should be
cleared through a centralized receiving department which is ind
pendent of the purchasing, accounting and user departments. This
department should be responsible for determining the quantity and
quality of goods received, that the goods received are in ateot-dat c+
'pith the purchase •order, for the preparation tit a rtceiVing report
trd for the transmittal of °goods received to the user departiixetits.
The,rectiving •.tocunent issued should be a multiple part
renumbe ftd fort with copies going to
1. User departmefits -- to enable the storekeeper to make
an additional check - ': the materials prior to signing
a receipt for them and as a source for the entry in
the department's perpetual inventory records,
Accounting department -- as evidence that the goods
ordered were received in satisfactory condition in
support of recording and paying the vendor's invoice,
Purchasing department- -- to provide information for
any necessary follow-. p and as a source of information
for future ordering.
The original should be retained by the receiving department
as a permanent record of the receipt. All deliveries to user depart-
ments from the receiving department should be accompanied by an
authorized delivery advise or materials release.
Establishing a receiving department, as described above,
would not only greatly increase internal controls over receiving and
accounts payable but would also enhance existing internal controls
over materials usage and facilitate the use of economic order quan-
tities.
Physical Inventory:
Several problems were encountered, during our observation of
the physical inventories at the City motor pool and property main-
tenance department:
1. The counting of physical inventories extended over
several days and the operations of the departments,
continued during the time the inventory was being
taken.
2. There were not enough personnel available to take
the inventory. Additional staff, perhaps from the
accounting and internal audit departments, and more
experienced staff should greatly improve efficiency
and internal controls overthephysical inventory
counts.
3. Shipping and receiving continued during the inventory
without adequate controls. Proper controls should be
established over the movement of inventory during the
physical counting to insure that counts are correct
and cut-offs accurate.
t�Utr 3 emu,
We recomme.d that steps be takeh improvo physivAl. f�ttif
tury procedurts 80 Lid to promote- vffidi'tthc:y and str-t...hOt1 oit iut •tii it
tOhtrotss
.
tte trity ov#r.InventorYt
Th+e . s .t urity • t the City's tiotbr pool appears to be last
and it would he relatively easy tor someone to misappropriate sigma
tti 'icaht. nThoutht:s of inventory. We recotnt ehd that action be taken to
strtngthen security at the ;notor pool.
!eeOtxtts .rteeiwabl.e;
It was noted t at the City retains mazy delinquent rents,
waste collection charged, taxes acid assessments on the financial
records for long periods of time. We recommend that the City give
additional attention to the collection of delinquent receivables
and write --off all uncollectabie receivables when appropriate, in
light of statutory requirements, to addition, subsidiary ledgers
or analyses should be maintained detail the individual or
entity that owes the balance together with dates, amount and des-
cription of receivables for all accounts, assessments, taxes and
other receivables. This should increase the City's control over
such receivables and aid in their collection.
Fixed Assets:
The city does not depreciate enterprise fund or infra
governmental fund fixed assets. To comply with generally accepted
accounting principles and to fairly present the operations of these
funds, depreciation should be recorded.
Stadium Enlargement Fund:
At September 30, 1974,
September 1, 1968 in the amount
Florida National Rank account.
reissued asrequiredto prevent
misuse of these funds.
Cash:
the City had on hand checks dated
of $35,050 drawn on the City's
These checks should be voided and
the misplacement of the checks or
During our examination of cash we became aware that the
City redeems all items charged back against their bank accounts by
c positing their own funds in an amount sufficient to cover the amount
charged back by the bank. The City then follows up on collection
of the items charged back, itself. In order to help insure that.
deposits charged back by the bank are properly accounted for and
and there is adequate follow up on item= charged back by the bank,
we r §mm nd that t*. i City change itt pooicy t alto the tape,
banks to handle that, 41 back§ by entry in the eityl t #ce iu1'1' t
Certi Etd Public
°able Members of the City Cot'it ission
toy o _0 s
4. The Dade Coutityr Department of Public Works has completed appraisals
for the acquisition of right=oftway for the Boulevard, ttigirieerirfg work
for the boulevard is fib* ur►rlerway1
COMMtN1 ATION
The preliminary toning recommendations Made by the consultants specify that
the existing C.4 General Commercial zoning on the Boulevard should be eha.nged
to encourage a balance of lbw density residential and local commercial activity
complemented by proposed open space and recreationa.1 areas.
It is therefore recommended that the Commission extend the MLI< Interim Zoning
District for a period of six months in order to provide adequate time for the
Planning Department to review the zoning recommendations as accepted by the
Model City Administering 13oaa:da Additionally, this extension would allow time
for the necessary public hearings by the Planning Advisory Board and the City
Commission.
Page 2 of 2