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The original item was published from 3/22/2018 10:56:27 AM to 4/23/2018 12:00:04 AM.

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Posted on: March 22, 2018

[ARCHIVED] City implements improvement plan in response to FY 2016 audit report


Independence City Manager Craig Whitehead acknowledged the city has some work to do in the coming months to correct issues in its fiscal management procedures identified during a recent audit by an external accounting firm.

The 2016 annual audit was completed in late February by Yerkes & Michels CPA, LLC, and the firm presented its findings at the Independence City Commission meeting on Thursday. Whitehead said while annual audits are generally completed prior to the end of the following calendar year, the 2016 report was delayed due to a need for the accounting firm to more thoroughly review some issues and prepare a comprehensive report. The final report emphasized a need for improvements in several areas, including: More complete documentation related to routine financial transactions and bank reconciliations; improved understanding of and compliance with guidelines for managing grant funds; and more robust checks and balances and development of standard policies for all financial management practices.

“The audit helped us identify some significant weaknesses in our current financial accounting system,” Whitehead said. “This is, in fact, a system that has been in place for many years and, unfortunately, is much too vulnerable to human error.

“We fully understand what the vulnerabilities are, and we are moving forward with an aggressive plan to reinforce our processes with appropriate safeguards and controls.”

Whitehead said one of the key recommendations of the audit report is the establishment of a bookkeeping position to be filled by an experienced accounting professional who can provide additional oversight and expertise in financial management. The city is in the process of reviewing candidates now for the city treasurer’s position, which will be expanded to include additional accounting duties. 

“The problems identified in the 2016 audit are significant, no doubt, and we take them very seriously,” Whitehead said. “We are confident that the deficiencies are results of inadvertent human error coupled with an archaic system that allowed for such error, and no intentional mismanagement has occurred, and all monies have been accounted for.

“That said, we can and will do better. It’s not an overnight fix, and in the past year, with the help of new leadership, we have already implemented several gradual changes to our processes. We ultimately will have a much stronger system in place to reduce the possibility of mistakes in the future.”  

The 2016 audit document is posted on the City’s website at within the March 22, 2018, city commission agenda packet.        

2016 Audit Report
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