I-1 - Preliminary Official Statement - UR Loan Agreement

City of Tiffin Schedule of Findings Year ended June 30, 2019 Cause – Policies have not been established and procedures have not been implemented to maintain delinquent account listings, reconcile utility billings, collections and delinquent account balances and to reconcile utility collections to deposits. Effect – This condition could result in unrecorded or misstated utility receipts, improper or unauthorized adjustments and write-offs and/or misstated delinquent account balances. Recommendation – A listing of delinquent accounts should be prepared on a monthly basis. Procedures should be established to reconcile utility billings, collections and delinquent accounts for each billing period and to reconcile collections to deposits. The City Council or a Council-designated independent person should review the reconciliations and monitor delinquents. The review of the reconciliations should be documented by the signature or initials of the reviewer and the date of review. Response – The City has implemented procedures to have reports automatically run to ensure the “AR Audit Report” and “Trial Balances” agree. These numbers will be used in the new reconciliation spreadsheet the State Auditors provided. Conclusion – Response accepted. (C) Financial Reporting Criteria – A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatement of the financial statements on a timely basis. Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the City’s financial statements. Condition – During the fiscal year, receipts were recorded in the accounting records prior to the date they were electronically deposited in the City’s bank account. The City recorded property tax receipts received in July 2019 in the accounting records as received June 30, 2019. An adjustment was subsequently made by the City to properly exclude these amounts from the financial statements for fiscal year end June 30, 2019. Cause – Policies have not been established and procedures have not been implemented to ensure proper posting and dating of receipts to ensure accurate reporting of the City’s financial statements. Effect – This condition could result in inaccurate fiscal year reporting. Recommendation – The City should establish and implement procedures to ensure all receipts are properly posted in the proper fiscal year. Response – The City will do a better job to properly record its receipts. Conclusion – Response accepted. 55