Accountant unable to reconcile Menahga’s ledger, banking activity

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Menahga City Council accepted additional accounting and internal control reviews by Eide Bailly LLP at its May 10 meeting. He passed a 4-1 vote, with board member Art Huebner opposing.

In March, Eide Bailly was hired to compare the city’s ledger with bank account activity between November 1, 2020 and January 31, 2021.

After reviewing the December 2020 general ledger, Eide Bailly identified $ 481,930 in outstanding credits and $ 1,832,393 in outstanding debits that they were unable to reconcile to the city’s bank account.

They also identified $ 99,701 in open bank deposits and $ 287,983 in open bank disbursements that they were unable to reconcile with the ledger entries for the same month.

The city uses a checking account for its general alcohol, municipal, COVID-19, revolving loan fund for the economic development of sewage and water funds.

In a letter dated May 10, Eide Bailly wrote that the need for more information and the city’s budget limit of $ 5,000 for the project meant they were unable to complete the reconciliation.

“Based on our review, a detailed breakdown of the source of cash deposits in addition to a thorough review of point-of-sale records is needed to reconcile liquidity. A detail of the cash deposit could not be provided upon request as the city does not easily keep this type of information, ”the letter said.

The letter continued that the city’s general ledger for each fund “does not provide enough detail to reconcile the deposits that apply to payments received.” In addition, the liquidity of each fund appears to be mixed and is not detailed in the accounts. For these reasons, we are unable to provide a complete reconciliation to sufficiently identify accounting errors or other anomalies. ”

Eide Bailly recommended an accounting review of additional months to reduce the number of outstanding items. The city will be billed in increments of $ 5,000.

The cabinet suggested a review of the city’s current policies and procedures “to identify weaknesses in internal controls.” The city will have to pay a fixed fee of $ 12,500.

Coding errors in the city’s accounting software, called Banyon, are the problem, city administrator Curt Kreklau said. “We know how much money we have. We know where it is. “

These mistakes can be corrected now, said Mayor Liz Olson.

Kreklau recommended delaying further consideration, and Huebner nodded.

Olson suggested that the city auditor work with Eide Bailly during the 2020 audit, which was due to start this week.

Council member Durwin Tomperi asked about cash deposits associated with all sources of income. “How do you figure out where they’re all going?”

Kreklau said the point of sale system is supposed to distribute this. Eide Bailly refers to a receipt distribution report, which does not match, he explained. “So they have a lot of work to find these individual transactions.”

Olson asked about cash receipts, “so why don’t you just send them that?”

Kreklau said he shared the information with Eide Bailly.

“I think we can’t stop now,” Olson said, making the motion to approve further investigation.

Tomperi said, “If the forensic auditors can’t reconcile it, and you blame Banyon on the data entry and not the breakup, why don’t we go through the process in order to get a good start and go. forward?

Tomperi said it was a cheap long-term investment, noting that he had been in business for 30 years and had reviewed hundreds of financial statements. “If I was running a business with this kind of data from a forensic auditor, I’d be scared and my banker would shoot me by the ears and say, ‘What’s going on here? “”

Kreklau said: “I want this fixed too.”

In the related area, the council has approved a debt study to be completed by Ehlers Inc. A previous study was completed in 2015. Ehlers will prepare cash flow projections for each of the city’s general bond obligations. .

The council learned there was a second outbreak of COVID-19 in Greenwood Connections.

At the time of the council meeting, two residents and five staff tested positive.

Greenwood Connections administrator Laura Ahlf noted that both residents were fully vaccinated and doing well. One had mild symptoms, the other was asymptomatic.

In his report, Ahlf wrote that unvaccinated staff complained to the Greenwood Connections Board who felt “to be blamed for the recent outbreak and humbled by the certificates on the wall showing who was vaccinated and that the establishment requires them to be vaccinated. “

Ahlf reported that there was only a 30 percent vaccination rate among staff. The certificates do not shame anyone, she noted, adding that some facilities publish certificates on their Facebook pages. The facility follows the guidelines of the Minnesota Department of Health, and the facility should educate the staff.

“We will continue to encourage vaccines, as we expect us to do,” Ahlf wrote.

In the remaining cases, the board did the following:

  • Approved spending up to $ 700 to complete a mile-long biking and hiking trail on town property, northwest of town compost pile. Despite being an easily navigable trail, Tim Ellingson said users would be willing to sign disclaimers.

  • Accepted Ewanika’s Unlimited Repair LLC estimate of $ 9,000 to $ 11,000 to repair the city street sweeper.

  • Approved the purchase of four outdoor security cameras at a cost of $ 4,073 from the West Central Telephone Association. Two will be placed at the city beach and two at the city campsite.

  • Approved the purchase of a pipe rack and toolbox for the city utility truck, not to exceed $ 4000.

  • Electrical work approved at Greenwood Connections estimated at $ 35,800 by Barberg Engineering.

  • Denied a counter-proposal from the Township of Hunterville for a fire contract.

  • Local real estate agent Joannie Liimatta has heard that the walleye is up for sale.

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