109 Board receives audit By SANDRA STONE The 109 Board regular monthly meeting Oct. 16 opened with a review of the audit conducted by Chilton & Medley, PLC, for the years ended June 30, 2006, and June 30, 2005. Board members received a draft of the audit, which will be finalized pending receipt of several more items. In reviewing the financial statements, Chilton & Medley noted the department has incurred recurring losses and increased expenses, causing negative working capital and net assets. In the statement of net assets, it was noted the cash and cash equivalents have decreased about $85,000 over the last year. Capital assets have also decreased approximately $111,000, most of that attributed to depreciation. Accounts payable have increased about $60,000, and liabilities have decreased, mostly to do with debt being paid off. Chilton & Medley noted two recurring payments of long-term debt, one an annual payment, the other a monthly payment of $20,719. Bookkeeper Wanda Terrell clarified that was a semiannual payment, not a monthly payment. The correction will be made to the final audit. Regarding revenue and expenses as of June 30, 2006, garbage collection fees have increased about $69,000 while revenue from recycling is down nearly $8,000. Garbage and recycling expenditures decreased about $19,000 while operating expenditures increased about $174,000. Several reportable conditions were shared with the 109 Board. Document retention: Copies of checks and/or remittance advice should be retained in the records. Accounts receivable: There are several outstanding balances not secured by liens. Chilton & Medley recommends reviewing and writing off after one year. Also recommended was an upgrade to the software to assist with aging of accounts. Cash controls: No one person should perform any two or more duties with regard to custody of assets. For example, the person who prepares the deposit should not be the person who makes the deposit. Likewise, the person who writes checks should not be the person who signs or mails the checks. Chilton & Medley also recommended a tracking system for the vendor master file to ensure all information is correct. Additionally, the formulating of an accounting manual was recommended to ensure consistency of transactions and procedures. Other recommendations were as follows: Establish policy to separate between capital and expense items. Inventory fixed assets to ensure statements reflect what is owned by the organization. Establish a code of conduct and conflict of interest policy. Adhere to purchase order policy to help monitor purchases. Present bank statements to the board for review by the treasurer.
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