WINDSOR

Four of the five weaknesses in internal controls listed in Windsor’s 2017-2018 audit report should be gone by the time the town completes its audit process for the 2018-2019 fiscal year, according to Town Manager Michael Stallings.

Internal controls, he explained, refer to policies and procedures intended to ensure that no one person is doing every step of a process, when possible, thereby reducing the likelihood of any bookkeeping errors being made. The 2017-2018 audit report – which was originally planned to be completed in November 2018, but Windsor’s Town Council received in June 2019 – is not yet posted to the town’s website. However, according to the recorded minutes of the Town Council’s June 25 meeting, the audit had identified weaknesses in the town’s internal controls for financial reporting, segregation of duties, processing invoices, balance sheet account reconciliations and the town’s receipting process.

Aaron Hawkins, a CPA with the town’s auditing firm, Robinson Farmer Cox Associates, explained to the Town Council members on Tuesday, June 25 during his audit presentation that his firm was recommending that the town revisit its purchasing policy regarding which town employees can approve invoices and what dollar threshold requires Town Council approval. The town’s current policy, which was last updated in 1997, specifies that the town clerk may approve expenses up to $300, the town’s maintenance man may approve expenses up to $100, the town manager may approve expenses up to $5,000, and anything over $5,000 requires Town Council approval.

Hawkins also explained his firm’s concerns regarding separation of duties, stating that the town currently has only one or two people responsible for an entire process, meaning in some cases the same person who approves a payment is the same person who writes the check for that payment.

“A lot of towns your size, you’re limited in your staff,” Hawkins said. “This is a problem you see in quite a few towns.”

During the Town Council’s July 9 meeting, after Councilwoman Kelly Blankenship asked for a discussion of the town’s audit results, Stallings said he agreed with Hawkins’ recommendation that the town revisit its purchasing policy, but added that Hawkins’ other concerns, save for the separation of duties, were all related to either Robinson Farmer Cox Associates operating differently than what the town had been accustomed to with its previous auditing firm, or the town’s accounting software transition from Bright to Munis.

It had been the transition to Robinson Farmer Cox and to Munis that had resulted in the months-long delay in the completion and delivery of the 2017-2018 audit, Stallings had previously confirmed to Windsor Weekly in May. At the time, he explained, “Delays with the financial system made us miss the regularly scheduled work window for the auditors. Once we corrected the issue switch the financial system, we had to wait for the auditors to finish their other work to be able to come back to us.”

Now, he said, the town has a better understanding of what Robinson Farmer Cox expects from the town, and the town’s software transition has been completed, meaning it no longer needs to collect receipts using one system and rely on another for financial statements. Therefore, these issues should not reappear during the 2018-2019 audit process.

“I think the only action we need to take is an update to the spending limit policy,” Stallings said.

As for the lack of separation of duties, Stallings said this will likely persist until such time as the town can grow and hire additional staff. He added that he expects the Town Council will take action to revise Windsor’s spending limit policy during the Council’s July meeting.

Despite the listed weaknesses in internal controls, Robinson Farmer Cox issued a standard unmodified opinion for the town’s 2017-2018 books, concluding that the town’s financial statements indicating an end-of-year surplus of $132,213 were free of any material misstatement.