2017 Audit Released

The city of Toledo today received the financial audit for the year ended Dec. 31, 2017. The audit can be found here.

The Auditor of State’s office completed the 2017 annual financial audit and opined on the city’s financial statements presented in the Comprehensive Annual Financial Report. The Auditor of State was asked to perform the 2017 audit. As result of the audit, the city must correct six official findings.

“As expected, the audit revealed several things the city did not do properly in 2017 and previous years,” Mayor Wade Kapszukiewicz said. “Part of the reason I decided to run for mayor was to help fix the city’s financial problems. We have already begun the process of correcting the issues identified by the Auditor of State’s office. My administration knew that we would be inheriting some financial issues and thanks to the work of the Auditor, now we have a framework for the things we need to fix."

Two of the findings concern how many and which city staff can make changes to the city’s financial system software and modify user access privileges. The Auditor of State stated that the number of staff should be reduced to only those individuals whose job requires that they make changes to the financial system software or use specific transactions. This review already has begun and user access privileges have been restricted.

The city is required to submit certain portions of the annual financial report to The Auditor of State within 150 days of the end of the fiscal year. The city met this deadline for the 2017 Comprehensive Annual Financial Report; however, additional audit adjustments were required and entered after that deadline. As a result, a finding was issued because the annual report was not completed early enough to allow an adequate review prior to the deadline.

The Auditor of State issued a finding related to capital assets. Of the city’s total capital assets, approximately 2.5 percent of them were labeled as unidentified in the financial system. As a result, adjustments to the financial statements were required. The finance department is reviewing its capital asset policies and procedures to ensure all capital assets are recorded properly for financial reporting purposes.

A finding was received from The Auditor of State regarding bank reconciliations. Although all bank reconciliations were submitted for the 2017 audit period, 2018 bank reconciliations for certain accounts were not timely completed and reconciling items were still outstanding. The finance department is committed to developing a process so that monthly bank reconciliations are completed within 30 days after the end of the month.

A finding was issued for the reporting of expenditures related to federal grants. The Auditor of State determined errors existed on the initial submission of the Schedule of Expenditures of Federal Awards report, with certain grant expenditures either overstated or understated. Adjustments were made to correct the totals. No funds were misappropriated. The finance department will work with appropriate city departments to reconcile federal grant expenditure entries throughout the fiscal year to ensure Schedule of Expenditures of Federal Awards reporting accuracy.