2018-10-11 / Front Page

Value found in internal control review following results presentation

By Tanya Terry
810-452-2645 • tterry@mihomepaper.com

BURTON — Following the internal control review requested by the Burton city council because of concerns that arose at the Department of Public Works (DPW), Michelle McHale and Eric Conforti of Plante Moran came before the city council recently.

McHale said they’d had collaborative session with administration regarding observations and recommendations.

Conforti said the vendor and employee information initially provided did not include social security, tax ID information or banking information. Plante Moran was provided the updated files. They compared the old files to the new files, finding no major issues. New analytics were available. Conforti reminded the council and community the scope of the review was years 2014- 2016.

“This was not an audit,” he said. “This was not an investigation. This was the city asking us if we could take a look at some of our processes and let us know if there were areas where we could strengthen our internal control environment.”

The first analytic Plante Moran did was comparing employee social security numbers to vendor tax IDs. In the file of 21,080 vendors, only about 350 had tax ID numbers associated with those accounts. Conforti said it wasn’t that someone went in and deleted the files. He said though some tax ID numbers should be put in in the future, if the vendor was being used for a very short time, a tax ID number may not be needed. He also said the information could have been stored elsewhere.

Councilman Vaughn Smith asked the controller what the process was.

“In the past, if the previous controller knew we had to issue a 1099, she would obtain the social security number or the ID number,” said Karen Moffitt, the city’s controller.

“As part of this review, we’re creating a vendor vetting form, where in the future we will have our vendors fill out an application and have them fill out a W-9,” Moffitt added.

On the form vendors will provide their employee iden- tification number.

When matching vendors to tax ID numbers, Conforti said there was nothing that jumped out as being along the lines of a fictitious company.

The draft report was presented in March. Plante Moran met with the administration in May.

Conforti confirmed tools at the DPW are being engraved with the city of Burton on them and log books are being used. Cameras were voted to be budgeted for at the most recent city council meeting in an amount not to exceed $6,800. Plante Moran recommended the cameras be put at the fuel pumps and at the cash registers within the department. Plante Moran recommended the city document who had access to secured storage in case something goes wrong.

“The city is in the process of changing the locks and keeping note of who they’re issuing those keys to,” Conforti said.

Random, periodic checks of asset lists was suggested. Increase of documentation on the disposal form will be implemented when assets are disposed of to include a photo and signatures. Additional measures are planned.

Councilman Danny Wells, who originally had his doubts about the necessity of the review, said he now regarded it as “necessary for looking after taxpayer dollars and getting back on track.” He said it’s critical to have the right people in city positions and noted several individuals recently placed in such, such as Deputy DPW director Charles Abbey.

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