Key insights
- Keeping files well organized and easily accessible can save time and energy during the audit.
- Providing village boards or city councils with accurate monthly treasurer’s reports can lead to better financial management and resource allocation.
- Monthly reconciling of other assets and liabilities by fund allows for timely changes and updates, reducing the risk of errors or omissions in the financial records.
Tackle your year-end audits with confidence and reduced stress.
Local governments often struggle with having their financial information ready for year-end audits. Smaller municipalities can face even more difficulties, given their limited staff and financial resources.
Learn some tips for reducing the workload and stress associated with preparing for an audit at the end of the year, especially when short staffed.
Make a checklist of closing procedures
A checklist of basic closing procedures can help your staff process accounting transactions timely, and track what’s needed and when things are due.
This checklist should include:
- A list of journal entries to be posted monthly (or in some instances quarterly and annually).
- A list of necessary accruals, if any, to be booked at year end.
- Bank reconciliations analyzed monthly.
Village boards or city councils should receive an accurate report of monthly activity, usually in the form a treasurer’s report showing — at minimum — beginning bank balances, a total amount paid out, a total amount brought in, and the ending balance agreeing to the bank statements. This report can help them make informed decisions. - Reconciliation of other assets and liabilities by fund.
Sometimes things get forgotten if they are left for too long. Reconciling these items monthly allows for timely changes or updates.
Keep files well organized
Organized files make any audit process smoother. Auditors may ask for copies of financial items — including expenses for testing or general review — as well as copies of bank statements and loan documents. They may also ask for agendas, meeting minutes, and ordinances passed during the fiscal year.
Being able to easily pull items for review saves time and energy. A simple filing system usually works better than something overly complicated. An easy, common-sense system should need little explaining and save time — especially with staff turnover.
Communicate with all departments
Communication between municipal departments can sometimes be difficult, but it’s essential to make the effort. For example, when a city operates a water system, it’s imperative to communicate with the fire department regarding fire hydrants to prevent services from being interrupted in the event of emergencies.
Informing city management of large purchases needed for capital items or repairs helps the finance department review budgeted or appropriated expenditures for the fiscal year and determine if other actions are necessary. Departments should notify the finance director when grant applications are submitted and when grant expenditures need to be reported to state and federal agencies.
How we can help
If your municipality is finding it difficult to catch up and audits are delayed, let us know. CLA has a wide variety of advisory and outsourcing services to help you get back on track.
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