Cape Gazette
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Dewey accepts audit report showing $263,000 surplus

Auditors recommend small changes in town accounting methods
By Chris Flood | Sep 03, 2014
Source: File photo Dewey Beach officials voted unanimously to approve an independent audit report that shows a budget surplus for Fiscal Year 2014 of more than $260,000 during their meeting Aug. 8.

Dewey Beach — After receiving an unmodified audit from an independent auditing firm, Dewey Beach commissioners unanimously accepted the report for Fiscal Year 2014 during an Aug. 8 meeting.

“It's the highest standard that can be given by an accounting firm,” said Town Manager Marc Appelbaum.

Dale Cook, town audit committee member, presented the report. He said the TGM Group from Salisbury, Md., reported the audit was a fairly easy process and that there were no major discrepancies to report.

The report shows that for the fiscal year starting April 1, 2013, and ending March 31, 2014, the town had a budget surplus of $263,135 after budgeting for a surplus of $64,992. The surplus represents a increase of 25 percent from the previous year's performance, which saw a budget surplus of $207,747.

While the report was generally positive, Cook said the auditor recommended the town make a few changes in its accounting methods.

The first recommendation was that the town move towards using the Generally Accepted Accounting Principals method of budget keeping, said Cook, which is what the auditors used for their evaluation.

Cook said the auditor did not express an opinion on the effectiveness of the town's internal controls.

“They specifically said they were not condemning the way the town was doing the budgetary process, but for their sake they want the town to go more towards GAAP.”

Adaptation would mean the town would have to change its current accounting practices.

Cook said the auditors recommend that when the money comes in, it should be logged, and then logged again when it's expended.

Cook said that as far as he can tell, most towns in this area go with a GAAP hybrid system.

Cook said the auditor also recommended the town should try to eliminate incompatible duties, and make more regular deposits of money.

“The town does not employ enough people in the auditing section of the town to eliminate incompatible duties, in other words, to totally segregate somebody writing a report and someone else possibly checking that report and saying that it's valid,” said Cook.

Appelbaum said in the next week or two the auditor will send a management letter to town officials with deficiencies and recommendations on how to adjust them.

At that time, said Appelbaum, town officials can look at those formal recommendations to see if moving toward the GAAP related budget system makes sense.

He said a decision on potential changes needs to happen in September and October because he and his staff will begin putting the town's budget for Fiscal Year 2016, which begins April 1, 2015, together in December.

 

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