CAFR 2016

CITY OF GREENSBORO, NORTH CAROLINA SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS

Year Ended June 30, 2016

2015 – 001 Accounts Payable

Audit Finding: The City has a process whereby the Treasury Division reviews invoices over a certain dollar threshold to determine whether they should be recorded as liabilities at year-end. Payments that are associated with a Purchase Order are not typically manually reviewed for potential liability accrual at year-end, but rather a systematic control is relied on by the Treasury Division staff to capture payment activity in the correct accounting year. For certain of the detected errors, receiving information was not entered into the financial system at time of receipt of goods, causing the systematic control to not function as intended. During our search for unrecorded liabilities, we found several expenditures that should have been recorded as a liability on June 30, 2015. Corrective Action Taken: Management implemented additional training in proper use of the purchasing system, in particular relating to receiving of goods, to key staff in the operating departments. In addition, new reports of Purchase Order payment activity during the cutoff period are generated for review. Training was also given to department level staff on proper review and coding of invoices to further help capture payment activity in the correct period. Audit Finding: The City develops a separate estimate of unbilled water usage for all of its billing cycles in the Water Resources Fund. The total of all billing cycle estimates are combined to calculate the year-end unbilled water receivable. The City has a process whereby someone other than the person who prepares the unbilled water usage estimate reviews it for accuracy. This calculation is prepared regularly and does not have a history of errors in it. We found one cycle that was recorded twice in the roll-up of the final unbilled water receivable. At the time the year-end receivables were reconciled, certain duties were reassigned to accommodate changes in staffing. The person currently preparing the reconciliation was not familiar with the year-end unbilled calculation performed by another in order to avoid duplication of recorded amounts. Corrective Action Taken: A checklist of required year-end journal entries is maintained. A step was added to the list to search for duplicate entries to aid the reviewer and other staff with the accuracy of recorded utility receivables and revenues. The reviewer also performed tests of reasonableness on recorded balances and make additional inquiries, as necessary. Additional staff training was also provided to ensure accurate accounting treatment going forward. 2015 – 002 Utility Receivables

-213-