I-1 - Preliminary Official Statement - UR Loan Agreement

City of Tiffin Schedule of Findings Year ended June 30, 2019 Findings Related to the Financial Statements: INTERNAL CONTROL DEFICIENCIES: (A) Bank Reconciliations Criteria – An effective internal control system provides for internal controls related to ensuring proper accounting for all funds by reconciling bank and book balances. Condition – The cash and investment balances in the City’s general ledger were reconciled to bank and investment balances throughout the year using the bank statement reconciliation function within the City’s software. However, the City does not perform a comprehensive bank reconciliation of all bank and investment accounts. We performed a reconciliation at June 30, 2019 and determined the bank balance was $10,233 less than book balance. However, we were unable to determine cause of variance as the City does not maintain an accurate outstanding checks listing. Cause – Procedures have not been designed and implemented to ensure all accounts are reconciled and the amounts recorded in the books and bank accounts are complete and accurate to ensure proper accounting for all funds. An accurate outstanding checks listing is not maintained. Effect – The lack of a complete bank to book reconciliation can result in unrecorded transactions, undetected errors and opportunity for misappropriation. Recommendation – The City should prepare monthly reconciliations of the general ledger to all bank and investment accounts. Variances between book and bank balances should be investigated and resolved in a timely. In addition, the reconciliations should be reviewed by an independent person and the review should be documented by the signature or initials of the independent reviewer and the date of review. The City should also maintain an accurate monthly outstanding checks listing. Response – The City has implemented procedures to have reports run automatically to allow the full reconciliation to be done. The new spreadsheet provided by the State Auditors has helped current procedures and now the reconciliations of the book and bank balances are being reviewed. The City is in the process of updating the outstanding check list in order to maintain an accurate listing. Conclusion – Response accepted. (B) Reconciliation of Utility Billings, Collections and Delinquent Accounts Criteria – An effective internal control system provides for internal controls related to maintaining delinquent account listings, reconciling utility billings, collections and delinquent accounts and comparing utility collections to deposits to ensure proper recording of utility receipts, the propriety of adjustments and write-offs and the propriety of delinquent account balances. Condition – Utility billings, collections and delinquent accounts were not reconciled throughout the year and a delinquent accounts listing was not prepared. Also, utility collections were not reconciled to deposits. 54