GRANTS, NM – The City of Grants approved their audit at their recent City Council meeting, following the approval of the audit there was a discussion from City Treasurer Victor Villalobos regarding a corrective action plan for Fiscal Year 2023 Audit.
The City of Grants Fiscal Year 2023 Audit was conducted by Patillo, Brown, and Hill LLP. The company gave a presentation about the exit conference for the audit that they conducted for the City of Grants. The presentation began with what responsibilities that the auditors have when conducting an audit and the auditing standards that they follow. The responsibilities of the auditors under regular U.S. auditing standards are to express an opinion on the city’s financial statements. The auditors give what they called “reasonable assurance” that they do not look at every single transaction and they pick internal controls to test and statistics. The auditors are also responsible for communicating significant matters related to the financial statement audit that are found during the testing process of transactions.
For the City of Grants one of the findings was for capital assets, according to the auditor they are still trying to get accurate listings of the capital assets following the change to a new system. There has not been an accurate, detailed report of capital assets, so the auditors do not have a good report to go through an audit. The opinion given by Patillo, Brown, and Hill opinion states that the City of Grants’ financial statements are fairly presented and are correct except for the capital assets. Until the auditors get the last finding of capital assets, the city will continue to have a modified opinion audit. The auditor said that although they are not able to give a clean opinion on capital assets, it does not affect the day-today operations of the city because it is a number that gets adjusted annually.
The reason behind the presentation of the audit is to inform the council how their financial records are being maintained and if there were any difficulties that they encountered during the audit. According to the auditor no difficulties were encountered during the audit and what this shows is that the city is that the financial records are well maintained and when they asked for purchase orders, invoices or supporting documentation like payroll timesheets, everything was in good order, it was given in a timely manner and the audit process went smoothly. No adjustments were made to the year-end accruals which are reported to DFA with each budget adjustments throughout the year. The auditor said that the purpose of this was to let the council know that if they had to make a lot of adjustments to the year-end accruals, they would have to be more critical with their numbers.
Last year the city had four findings which included capital assets, cash disbursements, segregation of duties, and pledged collateral. Three of these findings have been resolved except the capital assets. The city has had the finding regarding capital assets for the last couple of years, the auditor said that they will have to finish a final process to see a list of all the capital assets that the city has, so they can test the detailed list that is complete and accurate.
The council accepted the audit and discussed a corrective action plan for Fiscal Year 2023 Audit. Villalobos said that following the approval of the audit the council is required to submit a corrective action plan for any audit findings that they have and how they intend to get to the stage to correct it and to have an unmodified audit. The capital assets finding was first discovered around 2017-2018 when the city went to the new core processing system TYLER. The city began working last year to rebuild the capital assets lists by looking through records and documents. The city needs to also do a physical count of all the assets over $5,000, which is difficult because the city owns a lot of assets. The assets that will have to be listed are the assets that have been acquired since 2017, the last time capital assets weren’t a finding. Villalobos said he will also look back at the 2017 audit and make sure they have all the necessary assets listed. The city will continue to work towards resolve the capital assets finding to move towards an unmodified audit.