Purpose of Audit

The purpose of our audit was to examine the City’s internal controls over cash receipts for the period January 1, 2011, to November 13, 2012.

Background

The City of Hudson is located in Columbia County and has a population of approximately 6,700 residents. The City is governed by the Common Council, the legislative body which comprises the President and 10 Alderpersons. The City budget for the 2013 fiscal year totaled approximately $11.95 million.

Key Findings

During the period January 1, 2011, to October 31, 2012, City Departments other than the Treasurer’s office collected and reported cash amounting to $3.6 million.

• Each Department used a different process to collect, report and remit cash to the Treasurer.
• No one maintained general ledger accounting records or performed formal bank reconciliations for the Clerk’s bank account. Each of the other Departments we reviewed procured and issued its own duplicate or triplicate receipts for cash transactions without maintaining a log of these receipts.
• Certain Departments issued permits, which were the supporting documentation for several of these cash transactions, that were generated from standard computer forms and printed on multi-use paper with numbers that were handwritten. Furthermore, one of the Departments did not maintain logs of the permit numbers issued.

Key Recommendations

• Develop centralized formal cash collection procedures for all Departments.
• Maintain general ledger accounting records for the Clerk’s bank account. A formal reconciliation of the Clerk’s bank account balance to the general ledger cash account should be performed monthly. Centrally control and monitor the procurement of duplicate cash receipts used by all Departments.
• Ensure that each Department issues press-numbered permits only, and maintains a log of the permits procured and issued.