Sealy’s latest city council meeting centered on the discussion of and possible approval of a resolution in response to audit findings for the fiscal year ending 2023. The city received an unmodified opinion, which is the highest assurance level indicating that the financial records are free from material error. During the audit nine deficiencies were revealed that require immediate attention and the council has created a plan of action to correct them.

  1. Journal Entries Oversight: The audit highlighted a significant issue with the journal entries Twenty-six entries were noted as opposed to the expected three for a city the size of Sealy. To rectify this, the city has assigned the executive assistant to work closely with a financial consultant to ensure that journal entries are properly managed and that standard operating procedures are adhered to.
  2. Capital Asset Management: Discrepancies were found in the capital asset schedule, which is to be expected, prompting the creation of a detailed Excel spreadsheet to ensure accurate future reporting and to provide a reliable backup.
  3. Contract Management: With numerous long-term employees leaving and new ones unfamiliar with the filing systems, the city faced challenges in managing contracts. To remedy this situation a new multi-layer protocol is now in place to improve compliance and record-keeping.
  4. Maintenance of City Files: To address the unique filing systems used by different departments, the city plans to standardize records management by creating a Standard Operating Procedure (SOP) that mandates a consistent approach across all departments. Each department will have its own drives so all information is in a central location in each department.
  5. Investment Income: Delays in moving funds to investment opportunities led to lost revenue. In response, a new capital improvement project funding spreadsheet will track all projects and grants, improving liquidity management and investment timing.
  6. ACH and Check Security: The audit found issues with Automated Clearing House (ACH) transactions and check security. The city has since implemented a positive pay system to verify checks and prevent fraud. The Finance Director, Public Works Director and the Planning Director worked together to create a standard policy for check submission and handling.
  7. Daily Deposits Protocol: Problems with holding checks in the vault led to the creation of a standard policy that ensures timely deposits, addressing previous delays and potential losses.
  8. Franchise Fees for Utility Funds: There was a lack of a consistent method to calculate franchise fees for utilities. A new spreadsheet and method have been established to justify and manage these fees accurately.
  9. Compensated Absences Compliance: The city must allocate funds for compensated absences starting in the fiscal year 2025. This will ensure that all such liabilities are covered at the current pay rates, addressing potential financial impacts.

In addition to these specific actions, the council discussed the importance of transparency in budget descriptions and the need for ongoing financial management improvements. The resolution is a step towards rectifying the identified issues and enhancing the city’s financial health.

 

 

You can watch the full report starting at the 01:03:00 mark of the video below:

 

 

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