GLOVERSVILLE — Independent auditors found the city’s 2019 finances present fairly in a recently issued report on the annual audit that was conducted last year.
The independent audit of the city’s 2019 financial statements was conducted by Whittemore, Dowen & Ricciardelli, LLP last year. The Common Council received the results of the audit last month after the audit process carried out last year was slowed down by the coronavirus. The council approved a resolution accepting the 2019 audited financial report on Tuesday.
Auditors in the report state that the city’s regulatory financial statements present fairly in all material respects. The auditors issued an unmodified opinion, the highest mark, for financial statements and accounting practices related to the city’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance, revenues and expenditures.
However, auditors issued qualified opinions related to the city’s general fund and sewer fund. The report notes that the city has not adopted the regulatory accounting methodology for reporting other postemployment benefits and did not complete required disclosures for these benefits in the annual financial report update for 2019.
The auditors noted that the effect of omitting the liability and expense for other postemployment benefits from the city’s 2019 financial statements has not been determined. But the omission means that prepaid assets related to these benefits were not recorded as required by state accounting regulations. Proper recording would have led to an increase in fund balance and decrease in expenditures.
Aside from these matters, auditors found that financial statements and reporting practices related to the city’s general fund and sewer fund otherwise present fairly in all material respects.
The audit also included testing by auditors of internal controls over financial reporting in accordance with government auditing standards, although auditors do not express an opinion on the effectiveness of controls as part of the reporting process.
During the audit, no deficiencies or material weaknesses in internal controls were identified. However, auditors identified one significant deficiency in internal controls for failure to perform an annual risk assessment of the city’s finances. Auditors pointed to the importance of analyzing risk to detect misstatements of the city’s finances or to potentially expose fraud.
The finding has been pointed out in past audits and auditors recommended the city adopt a formal policy and procedure for performing an annual risk assessment to monitor adherence to internal controls.
The audit report notes that the city has created a risk assessment that has not yet been adopted. City Commissioner of Finance Tammie Weiterschan in January reported to the Common Council that she is working on a risk assessment policy to clear the finding from the city’s future audits, aiming to introduce the policy for adoption in March.
Additionally, auditors identified one instance of noncompliance with reporting requirements after the city neglected to issue a public notice after filing the annual audit report in 2018. City’s are required to provide public notification within 10 days after filing annual audit reports under state general municipal law.
The resolution approved by the Common Council on Tuesday accepting the 2019 audit report authorized the city clerk to publish a public notice regarding the report informing residents that the document can be viewed at the City Clerk’s Office.
Auditors also found that all compliance requirements were met for all of the city’s major federal programs. Required testing by auditors of internal controls over each of the federal programs did not identify any deficiencies or material weaknesses.
