Washington Evening Journal
111 North Marion Avenue
Washington, IA 52353
BRIGHTON — State Auditor Rob Sand released an “agreed-upon procedures engagement” for the city of Brighton June 30. The report, which covers the period from July 1, 2020 to June 30, 2021, found a total of nine issues the state recommended addressing.
State finds account reconciliation issues
One of the first findings of the state report showed contradicting balances in city accounts. While the differences weren’t major, they’re still worth noting.
“For the two months observed, the bank and book balances did not properly reconcile,” the report said. “Variances of $1,633 and $1,670 were not resolved for September 2020 and June 2021, respectively, due to unrecorded investment interest. In addition, bank reconciliations were not reviewed by an independent person for the entire year.”
Another reconciliation concern regarded utility billings, collections, and delinquent accounts. The state said Brighton’s balances were mismatched throughout the year, to which the auditor suggested increased oversight.
“The City Council or other independent person designated by the City Council should review the reconciliations and monitor delinquent accounts,” the report said. “The review should be documented by the signature or initials of the reviewer and the date of the review.”
Public safety spending raises some red flags
One finding reported that the city spent more than it had budgeted on public safety for the fiscal year ending June 30, 2021, to which the state recommended a budget amendment to document said expenses.
Also related to public safety, the state backed the city’s decision to stop using its municipal gas account to fund the fire department, a switch that may have been responsible for confusion and eventual conflict over the department’s funding earlier this year.
“Fire protection is not an operating expense of the Enterprise, Gas Fund and supporting documentation does not support why this expense was paid from the Enterprise, Gas Fund,” the report said. “If the City determines a surplus exists in an Enterprise Fund, the surplus amount may be transferred to another city fund, by resolution of the City Council. Documentation supporting the surplus calculation should be maintained.”
Oversight, internal checks need a boost
State auditors often make recommendations related to governments’ internal checks and balances on the fiscal process. Some of these — like lacking segregation of duties — are par for the course in small towns like Brighton.
“We realize segregation of duties is difficult with a limited number of employees,” the report said. “However, the City should review its control procedures to obtain the maximum internal control possible under the circumstances.”
Other issues largely stemmed from a lack of documentation for various city affairs. The state found two city employees on payroll rates not documented with city council approval, something that can be fixed in a single meeting. Another finding said journal entries were not documented, and another found some city council minutes were signed by the mayor, but not the city clerk.
Less routine was a finding related to an Amazon account, which the city uses for municipal purchases. The audit report said that account needed regulation.
“The City has not adopted a formal policy to regulate the use of the account and to establish procedures for the proper accounting of Amazon account charges,” it said. “The City should adopt a formal written policy … (that) at a minimum, should address who is authorized to use the account and for what purposes, as well as the types of supporting documentation required.”