1971CITY OF BANGOR
AUDITORS' COMMENTS AND RECOMMENDATIONS
Audit Scope
We have performed our examination in accordance with generally accepted auditing
standards and recommendations by the State Department of Audit of the State of
Maine and the National Committee on Governmental Accounting of the Municipal
Finance Officers' Association.
Internal Control
We have reviewed the system of internal control surrounding the financial and
accounting functions of the City and found it to be generally adequate. We offer
the following suggestions for further improvement in internal control and
accounting procedure:
1. For several years we have commented on the fact that the same employees
were making collections and keeping the necessary records regarding parking
violations. It was pointed out that such a procedure was in direct violation
of principles of internal control and to alleviate the situation we
recommended that the City Treasurer assume the responsibility of
collecting such fines. During 1971 this recommendation was not implemented.
However, we understand that during 1972 the Treasurer will assume this
collection responsibility.
2. The City employs an open invoice system for accounts receivable, but does
not have a detail aged listing of the accounts for management's review.
Since the City now has a computer system capable of providing such a
detail listing, we recommend that the accounts receivable be placed on
this system as soon as possible.
3. During our review of inventories, we found that the maintenance material
inventory was not physically inventoried during the year. We also
discovered that the perpetual listing of this inventory was not agreed
to the general ledger at any time during the year with the result
that at year-end the general ledger was at variance with the perpetual
listing. We feel the control over the perpetual records could be
improved and suggest that a complete physical inventory be taken in 1972.
4. The City now has a third generation computer with an abundance of
available capacity and it would seem, therefore, that some additional
accounting applications could be performed on this system. A preceding
paragraph recommended an accounts receivable application and suggested
that it would provide better control and improved detail records. We
also feel that other applications such as fixed asset detail records,
and perpetual inventory records, could be developed and placed on this
system. We feel that automation of these accounting functions, as well
as others, would bring about better accounting control'and provide
greater information for management decision-making. We have not made
feasibility studies regarding these suggestions, however, we do feel
they deserve management's consideration.
CITY OF BANGOR
AUDITORS' COMMENTS AND RECOMMENDATIONS
All of these recommendations have been discussed with the City Auditor and he has
informed us that he will attempt to incorporate them within the City's accounting
system.
We would like to express our thanks to the officials and employees of the City
of Bangor for their cooperation and assistance during the course of our
examination.