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Cityot <br />Louisville <br />COLORADO • SINCE 1878 <br />FINANCE COMMITTEE <br />COMMUNICATION <br />SUBJECT: <br />EIDE BAILLY REPORT ON INTERNAL CONTROLS AND <br />REVENUE COLLECTION PROCEDURES <br />DATE: DECEMBER 14, 2015 <br />PRESENTED BY: KEVIN WATSON, FINANCE DIRECTOR <br />SUMMARY: <br />The City of Louisville has four main revenue collection areas that receive, reconcile, <br />report, and deposit City revenue. Other than Finance Department's front counter in City <br />Hall, there are three main "offsite" revenue collection areas; the Recreation Center, the <br />Library, and the Golf Course. Because the collection processes at these three offsite <br />areas are not under the daily supervision of the Finance Department, and because <br />these sites process a significant amount of cash transactions, staff has recommended a <br />periodic third -party review of offsite internal controls and collection procedures. <br />On September 14, 2015, the Finance Committee recommended to the City Council an <br />engagement letter with Eide Bailly, LLC to review the internal controls and revenue <br />collection procedures at the three offsite areas. On September 15, 2015, the City <br />Council authorized the execution of that engagement letter. The engagement letter <br />including a list of agreed -upon procedures is attached. <br />Also attached is the final report from Eide Bailly dated November 16, 2015, which <br />contains a summary of the procedures performed and their recommendations to <br />enhance controls and processes for each offsite collection area. Staff agrees with all <br />recommendations and will work with the applicable departments to make the <br />recommended changes. <br />A preliminary draft of Eide Bailly's report was shared with the applicable departments on <br />November 23, 2015. The departments have reported that they are already taking steps <br />to comply with the recommendations: <br />• Library staff is formalizing procedures for purging patron records annually and is <br />developing a written protocol for handling keys to the copier. <br />• Recreation Center staff is developing a standard invoice form that will be <br />required for use by contractors requesting payment. The only recommendation <br />still under discussion is the recommendation for the Finance Department to <br />review each new contract for services in the Recreation Center. Staff is <br />discussing other methods to ensure compliance with the City's <br />contract /procurement policies. <br />• Golf Course staff has: <br />o Cross - trained staff on the processing of daily sales; <br />FINANCE COMMITTEE COMMUNICATION <br />8 <br />