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City: Outside auditors reveal issues with procedures, practices; Offer solutions

Two outside audits found some issues with the City of El Paso’s financial procedures and accounting practices and offered recommendations on how the city can improve some functions.

“The City of El Paso always welcomes the fresh perspectives we get from outside auditors,” said Mark Sutter, Chief Financial Officer. “We take their recommendations very seriously and will implement them as is appropriate.”

As it does each year, BKD LLP, the City’s external audit firm, completed a comprehensive audit of the city’s finances.  As part of their annual audit, the firm identified a few deficiencies in internal control of federal grant programs.

  • Generally, auditors noted a misclassification of some expenditure between state and federal grants as well as improper reporting and matching funds.
  • Specifically, they found $130,930 in Sun Metro expenditures submitted for reimbursement using Federal Clean Fuels Grant were misclassified or improperly reported; Additionally, $14,325 in El Paso International Airport expenses were not submitted in a timely fashion to the FAA for reimbursement.

To remedy these items, the City of El Paso has standardized reporting and improved training and support for grants. Policies and procedures have been updated regarding applicable credits and appropriate grant expenditures.

At the request of the Mayor with input from the City Council and the City Manager, a Special Audit Team from Lauterbach Borschow Certified Public Accountants was charged with completing a one-time review examining a total of 23 areas of municipal government and reporting back to City Council on their findings.

Areas include a review of the city’s budget and purchasing policies for construction of Southwest University Park, an assessment of whether operating reserves and contingency funds are sufficient, and determine if earnings on city investments are properly allocated to the City, component units, and fiduciary funds.

After studying all 23 areas, the following are included in the improvements which they recommended:

  • Office of the Comptroller

o   Transition away from a petty cash system to the use of Purchasing Cards (P-Cards) by more employees.

o   Develop a process for the use of journal entries to move money between City departments.

o   Regular meetings with reconciliation of the accounts realted to the Camino Real Regional Mobility Authority and the Property Improvement District to allow more timely reconciliations of accounts

  • Office of Management and Budget

o   Automating the process in PeopleSoft for processing and recording of budget transfers and amendments

  • Capital Improvement Program

o   Implementation of more specialized software for CIP projects in order to enhance reporting

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