State auditors found a number of issues related to Eureka Springs city finances and record-keeping, according to a report presented to a legislative committee last week.
The Arkansas Legislative Audit division presented reports to the Legislative Joint Auditing Committee Standing Committees on Counties and Municipalities, Educational Institutions and State Agencies on Thursday, May 12.
The report on Eureka Springs, which was based on the calendar year 2020, listed several findings.
Findings attributed to Mayor Butch Berry were:
■“The minutes of the governing body did not document the review of the findings and recommendations and the actions taken by the governing body for the prior report.”
■“An audit was not obtained for the city’s water and sewer department for each year from 2020, 2019, 2018 and 2017,” as required by state law.
Findings attributed to the city’s parks and recreation commission were:
■“Receipts were not issued for all funds received.”
■“Bank reconciliations were not properly prepared or approved by someone other than the person preparing the reconciliation.”
■“Cash receipts and disbursements journals were not properly maintained.” Findings attributed to finance director
Findings attributed to finance director Lonnie Clark were:
■“the Street Fund financial records contained misstatements in assets and revenues of $64,112 due to errors in accounts receivable.”
■“The Other Funds in the Aggregate contained misstatements in assets, liabilities, fund balance, revenues and expenditures of $459,650, $8,359, $64,353, $491,456 and $82,846, respectively, due to errors in cash, unrecorded receivables, classification errors, and posting errors.”
■“The effect of these errors constitute a control deficiency in the process of preparing financial records.”
■“Bank reconciliations were not completed in accordance with Ark. Code Ann. § 14-59- 108 as follows: Bank reconciliations were not always completed in a timely manner; bank accounts were not properly reconciled; bank reconciliations did not always indicate approval by someone other than the preparer.”
■“Receipts were not always issued at the time of collection or earliest opportunity.”
■A fixed asset listing was established, but records were not updated to include additions, deletions or control totals.”
■“There was no documented remote access security policy. Failure to establish and communicate an adequate remote access security policy could result in the unnecessary exposure or misuse of information resources.”
■Auditors recommended that city management implement procedures to ensure financial statements are properly posted, and Berry and Clark agreed and have approved “the appropriate adjustments” to the city’s financial records, according to the report.
Findings attributed to the cemetery commission were:
■“Bank reconciliations were not prepared. … A similar finding was noted in the previous report.”
Asked by email on Tuesday if he’d like to comment on the report, Berry said: “This is on the next week’s City Council agenda to discuss.”
