×

East Liverpool touts mostly clean audit

EAST LIVERPOOL — The City of East Liverpool received a mostly positive report on its financial statements for the 2018 year; however, State Auditor Keith Faber noted that officials have some tweaking to do.

In the independent auditor’s report issued Tuesday, investigators did identify a “significant deficiency,” regarding the city’s cash reconciliation processes that included stale dated checks that remain unclaimed. According to the Ohio Revised Code, “unclaimed money shall be paid into the treasury of the public office with which he is connected to the credit of a trust fund and shall be retained there until claimed by its lawful owner. If not claimed within a period of five years, the money shall revert to the general fund of the public office.”

The review of December 2018 identifies an unclaimed monies error for $5,794 due to voiding out stale-dated checks in the system, use of $1,146 worth of NSF checks from 2014 to 2016 to reconcile accounts, and carrying forward unknown payroll errors of $404 monthly.

Eight of the 31 purchase orders selected for review totaling $198,573 should have been cancelled at year end and not included in the outstanding encumbrances,” according to Faber’s findings.

City Auditor Marilyn Bosco said she was pleased with how the audit went overall.

Other recommendations included:

— A city public records policy and records retention schedule. ORC 149.43 requires not only a policy that mirrors the Ohio Attorney General’s Office be established by be posted to assure that the city provides the necessary transparency over its recordkeeping.

–Issuance of 1099 forms for vendors receiving payment in excess of $600 per year. The management letter identified that the city paid independent contracts in excess of $600 in 2017; however, issued no form, which may “result in an inaccurate tax return filed by the payees,” referring the matter to the Internal Revenue Service.

–Competitive bidding procedures. The auditor’s office processed purchase of a new truck with accessories for $53,886 without awarding the contract through the competitive bidding process, which “could result in the city overpaying for purchases.” According to ORC 735.05, purchases, projects and contracts exceeding $50,000 should be bid out as law requires, the letter noted.

— Segregation of duties. Proper segregatio not dutires is not possible when only a few people handle all aspects of the internal control cycle, which is a problem in East Liverpool due to the staffing as Bosco explained. The auditor recommended that possibly redirect some of this record keeping, authorization, custody and reconciliation to employees out of the Bosco’s office to individual city departments.

For example, department heads can receive cash and reconcile cash receipts, preparing the bank deposit for the city auditor who will then record and reconcile it accordingly.

According to Faber, segregation of duties provides two significant benefits: making fraud more difficult and making detection of errors more likely when they occur.

The city’s most recent audit was issued on Oct. 22 and made public Tuesday on the state auditor’s website and during city council’s Finance Committee, where councilmembers Fred Rayl and Raymond Perorazio reluctantly agreed to recommend a $4,000 payment of a $12,000 bill to council as a whole for the repair of a sidewalk next to Northside Church.

Brian Kerr didn’t support the action, which all three men believed should have come through finance committee before a “Gentlemen’s Agreement” was struck for the fix. The repair was necessary due to water damage, according to Rayl.

The Finance Committee also agreed to hold off taking action for a possible increase on a $5 license plate fee that generate another $41,000 annually for the city to help pay for such items as road salt.

Rayl and Kerr agreed with Perorazio that they need to take a wait-and-see attitude considering the loss of traffic camera revenue, so they unanimously agreed to table it.

In other action, the committee also agreed to forward the city’s revised non-union employee wage ordinance for council consideration., after asking for it to return it for reconsideration last month.

The legislation, which provides much needed 5 percent pay hikes for the city’s police and fire chiefs, also originally included increases for the safety-service director and his deputy. Kerr wanted to reiterate that the increases for the chiefs to assure that they are higher paid than their underlings are still included; however, the safety-service director hikes out of the stormwater fund are not.

Vacation and sick time language also can modified by council if approved.

Council next will meet at 6 p.m. Monday in city hall.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

COMMENTS

[vivafbcomment]

Starting at $4.39/week.

Subscribe Today