Audit report says Salem in good financial shape
Salem - A recent audit report shows that the town is in good financial shape but could use some improvement in its accounting practices.
The report on the 2012-13 fiscal year shows that the general government returned $206,125, or 5.8 percent of the general government budget, to the town's general fund, which First Selectman Kevin Lyden said made him "very pleased."
"I credit that to the firm enforcement of our purchasing policy and strong negotiations with all our vendors, as well as a continued concerted effort of fiscal responsibility by all our departments here in the general government," Lyden said.
During the 2012-13 fiscal year, the town government also increased the amount of general obligation bonds by $3,300,000 because of a new bond anticipation note for construction on Salem School.
Marcia Marien from O'Connor Davies, the firm that prepared Salem's audit, told Board of Finance members in December that despite a few weaknesses outlined in the report, the town is financially healthy.
Marien noted that the town's record-keeping has improved in recent years, but said that Salem could still improve upon its control over financial reporting. The O'Connor Davies report cited two weaknesses in Salem's financial practices.
One of the weaknesses identified by the report was a lack of policies and procedures designed to "achieve their objectives and meet their fundamental responsibilities for effectiveness, efficiency, compliance and financial reporting." The report recommended that the town develop a framework of internal controls practices as part of developing an accounting manual.
The report also took issue with the town's segregation of duties. According to the report, authorization of transactions, custody of assets and record-keeping tasks should be performed by three separate individuals. Not doing so "could lead to funds being expended in a manner not consistent with the intentions of management," the report states.
The audit found that these responsibilities were not kept separate in Salem's tax collection office. The town should receive segregation of duties and restructure them as necessary, then have the new procedures approved by the Board of Finance, according to the report.
MOST VIEWED MEDIA
MOST DISCUSSED STORIES