Municipalities can begin to assess their controls by asking questions such as:
- What are employees doing?
- What can go wrong?
- Is the city collecting all the revenue it is due?
This process should be started before the auditors arrive. A good way to begin the assessment is to document the specific job duties of each employee involved in any part of the financial process. Once that is completed, those duties should be reviewed to ensure they are separated as much as possible.
The process should include determining what type of monitoring is performed to ensure transactions are being processed accurately and completely. Management should review at a very minimum the following items:
- monthly financial reports
- bank reconciliations
- utility adjustment reports
- accounts receivable reconciliations
- police ticket and court docket reconciliations
- property tax reconciliations
Refer to the Internal Control and Compliance Manual for Governmental Entities and Other Audited Entities in Tennessee for ideas on how to start a self-assessment or contact your MTAS Finance Consultant.