MEETING OF COUNCIL - Town of Cambridge

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COUNCIL MINUTES TUESDAY 27 NOVEMBER 2012 Sundry Debtors A review of the sundry debtors invoices listing showed that invoices were not listed in numerical sequence and numerical control over sundry debtor invoices was unable to be ascertained. There is a risk that invoices raised may not be accounted for within the system and may result in loss of revenue. Management Comments: The debtors system is decentralized in that other locations apart from the administration centre are able to generate debtors invoices in the system. These locations include "community development operational; area", "Senior Services", "Wembley Community Centre" and "The Boulevard Centre". When invoices are raised and generated within the system, they are issued in sequence. However given that the system caters for various locations, they may not be filed or recorded in sequence at each location. A query can be generated in the system to check on invoices generated and sequence numbers as a means of control. Payroll A review of the "Employee Accruals Entitlement" report highlighted that there were sixteen employees with outstanding annual leave entitlements in excess of eight weeks to a maximum of sixteen weeks. It was recommended that any annual leave deferred be approved in writing by the Chief Executive Officer or by the Council as appropriate. Management Comments: A fortnightly employee accrued leave report is generated by payroll and distributed to executive management for review and actioning. This report shows those employees with leave in excess of three hundred hours or eight weeks leave. A comparison of accrued annual leave for those employees who have in excess of three hundred hours as at 30 June 2012 with leave outstanding as at 30 June 2011 shows that hours have reduced from 12,234 hours to 10,591 hours, a reduction of 1,643 hours or 13.5%. Addressing the issue of excessive leave is an ongoing exercise and employee leave reports will continue to be distributed to management to keep them informed and manage those employees concerned. This should see leave hours being reduced back to within manageable levels. General Accounting It was observed that some accounting staff are able to raise general journals for posting to the general ledger. We noted that there appears to be no review of journals raised by an independent supervisory level officer. We recommend that a review process by an independent supervisory level employee be established. This will provide evidence that the journals have been approved, accurately processed and are valid. Unauthorised journal entries may be used to cover up irregularities. H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\NOVEMBER 2012\D AU.DOCX 199
COUNCIL MINUTES TUESDAY 27 NOVEMBER 2012 Management Comments: Only a select few employees have authorisation to enable them to raise general journals for posting within the general ledger. These employees are the finance manager, accountant, assistant accountant and senior finance officer. A register is kept of all journals together with the details of the officers who generated them, which will be reviewed on a regular basis as a means of control. POLICY/STATUTORY IMPLICATIONS: Internal controls are administered in accordance with administration policies and procedures. The Town’s accounts and annual financial report are required to be audited each financial year in accordance with Section 7.2 of the Local Government Act 1995. The Town’s Annual Report is to contain the Independent Audit Report as required by Section 5.32(2)(h) of the Local Government Act 1995. STRATEGIC DIRECTION: This report is consistent with the Town’s Strategic Plan’s priority area of Capacity Deliver with the corresponding goal of open and transparent governance. ATTACHMENTS: 1. Interim Audit Report (Macri Partners) ADMINISTRATION RECOMMENDATION: That the interim audit report and responses to the recommendations be noted. Committee Meeting 20 November 2012 During discussion, Members expressed concern that the interim audit was conducted in July 2012 and not March as stated in the Audit Plan and that audit reports were timely to allow review and any remedial action to be taken. Amendment Moved by Cr Langer, seconded by Cr Bradley That a further clause be added to the motion as follows:- (ii) the Administration be requested to conduct the Interim Audit in March/April 2013. Amendment carried 4/0 Discussion ensued. With respect to Sundry Debtors, it was noted that the Administration reviews the outstanding sundry debtors report on a monthly basis. With respect to general accounting journals, it was noted that the Manager Finance sign off on a weekly journal register. H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\NOVEMBER 2012\D AU.DOCX 200
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MEETING OF COUNCIL - Town of Cambridge

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