Financial statement, audit report approved by Queen Creek Town Council

Queen Creek Town Council meetings are held in the Community Chambers, 20727 E. Civic Parkway. (Photo by Richard H. Dyer, Independent Newsmedia)

A financial audit of the fiscal year ending June 30 that was conducted by independent auditors was approved March 7 by the Queen Creek Town Council.

The audit is required by state law and was performed by the certified public accounting firm of CliftonLarsonAllen LLP.

“We’re here to examine what the town’s management, the financial statements that they’ve put together for us, and the assertions that they believe exist in those financial statements and to provide an opinion on them,” Sandra L. Cronstrom, CPA and principal from CliftonLarsonAllen, said to the council March 7.

“Our overall opinion on the financial statements this year was an ‘unmodified’ opinion. That means that your financial statements were materially correct,” she said.

“The town received an ‘unmodified’ opinion – this is the best opinion, commonly referred to as a ‘clean’ opinion,” Finance Director Scott McCarty said in a memo to the council.

“We are proud of this accomplishment as it helps to maintain our standing in the financial community with the bond rating agencies and bondholders,” he said.

Voting to approve resolution No. 1179-18 accepting the town’s fiscal year 2016-17 financial statements and audit reports were Queen Creek Town Council Mayor Gail Barney, Vice Mayor Emilena Turley and council members Jake Hoffman, Robin Benning, Julia Wheatley and Jeff Brown. Council member Dawn Oliphant was absent.

In a powerpoint presentation, Mr. McCarty said 2016-17 operating funds included $50.5 million in revenue and $44 million in expenses. The revised budget had called for $48.4 million in revenue and $46 million in expenses, according to the presentation.

“Revenues across the board were better than we budgeted and then, not only that, but they were more than we had last year, consistent with a growing community,” he said to the council March 7.

“Staff does an excellent job of managing your budgets at the director level,” he said.

As part of the audit, CliftonLarsonAllen came up with a list of recommendations. In a powerpoint presentation, Ms. Cronstrom said under internal control communication, material weaknesses reported were: internal controls over the utility billing process and numerous adjustments subsequent to year-end.

Material weaknesses were defined in the report as a deficiency is present and it is either material or it could cause a material misstatement.

Significant deficiencies reported were: internal controls over development services revenues, journal entries and payroll processing.

Significant deficiencies were defined in the report as a deficiency occurred, but it is not material and in all likelihood would not cause something to be materially misstated, but it’s important enough that it should be reported to governance.

A management letter included as part of the audit showed that there were concerns over Internet Technology that were found by a specialist brought in for the audit.

“The password requirements: They’re wanting to maybe have you beef up some of the password requirements based on industry best practices,” Ms. Cronstrom said.

One of the town of Queen Creek’s e-mail accounts allowed its user to never change the password, according to findings from the audit.

“I think there was one employee who also did not have the forced password change. It was overridden so that person was not required to change their password after a certain amount of time,” she said.

Also, the town is working on a disaster-recovery plan but it’s not yet complete.

“So that is just a continuing recommendation that you work on getting that done,” Ms. Cronstrom said of the disaster-recovery plan.

Also, “…we had a couple employees that had been terminated from the town and they still appear to be active within the IT system,” she said.

Other items in the management letter were segregation of duties over check processing, an update of authorized signers on bank accounts and outstanding checks.

A detailed response from staff on all of the issues was in the materials with the audit report, Finance Director McCarty told the council.

“Some of them are easy to fix, those that have been fixed and the other ones we’re diligently working on,” are in the staff response, he said.

Editor Richard Dyer can be contacted via e-mail at rdyer@newszap.com or at twitter.com/rhdyer or facebook.com/RichardDyerJournalist

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.

Facebook Comment