comprehensive annual financial report - City of St. Petersburg

City of St. Petersburg, Florida
Appendix A – Management Letter Comments
September 30, 2010
In planning and performing our audit of the financial statements of the governmental activities,
business-type activities, each major fund, and the aggregate discretely presented component unit and
remaining fund information of the City of St. Petersburg, Florida (the “City”), as of and for the year
ended September 30, 2010, which collectively comprise the City’s basic financial statements, we
considered its internal control in order to determine our auditing procedures for the purpose of
expressing our opinions on the basic financial statements and not to provide assurance on internal
control.
Current Year Observations and Recommendations:
Segregation of Duties over Investments
Observation: During the year, one employee had the ability to initiate and approve investment
transactions. This same employee also prepared the quarterly investment reports which are
reviewed by management.
Recommendation: We recommend that the City establish procedures where the responsibilities
of initiation, approval, and recording transactions are performed by different individuals. This
would provide adequate segregation of duties and strengthen controls over investments.
Management’s Response: The City has already implemented new segregation of duties as the
aforementioned employee is no longer employed by the City and the responsibilities were
divided to separate the investment authorization, execution, recording and reporting
responsibilities to various employees within the Finance Department.
Availability of Receivables
Observation: The City’s policies require for receivables to be collected within 60 days in order
to be reported on the fund level financial statements. It was noted that the City had number of
general fund receivables related to miscellaneous charges and fees which were not collectible
within 60 days of year end. This resulted in an audit adjustment to write down accounts
receivable by approximately $900,000 on the fund level statements.
Recommendation: We recommend that the City review the nature of accounts receivable
maintained at year end to assess the availability of these funds to be reported on the fund level
financial statements.
Management’s Response: The City will implement a new procedure where all receivables will
be evaluated to ensure that they are collected within the 60 day availability period, and any
amounts not collected during that time will be adjusted accordingly on the financial statements.
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