Audit finds city court had budget variances of more than 5%

The City Court of Morgan City’s 2013 audit shows the court incurred budget variances in excess of 5 percent in two separate funds, according to a report released Monday on the state legislative auditor’s website.
The court incurred budget variances in excess of 5 percent in the general fund and juvenile services center fund, the audit stated.
State law requires the adopted budget and any duly authorized adopted amendments shall form the framework from which the chief executive or administrative officers and members of the governing authority of the political subdivision shall monitor revenues and control expenditures, according to the audit.
The condition resulted from a failure to properly monitor the revenues and expenditures of the general fund and Juvenile Services Center Fund.
The audit stated that the court may not prevent and/or detect compliance violations due to over-expenditure of the appropriated budget, and/or errors or irregularities on a timely basis.
The auditor recommended that the court periodically compare actual activity to budgeted amounts and adopt budgetary amendments as necessary to cause compliance with state statutes.
Management’s response was that the court will more closely monitor budget to actual comparisons and adopt the necessary amendments to ensure compliance with state statute, the audit stated.
Unmodified, or clean, opinions were issued on the court’s financial statements for governmental activities, each major fund including general fund and juvenile services center Special Revenue Fund and the aggregate remaining fund information, the audit stated.
Deficiencies in internal control were disclosed by the audit of the financial statements and the conditions are considered material weaknesses.
An instance of noncompliance required to be reported under Government Auditing Standards was disclosed. A management letter was not issued, according to the audit.
The audit found that accounting and financial functions were not adequately segregated. The court’s internal control over financial reporting includes those policies and procedures that pertain to the court’s ability to record, process, summarize, and report financial data consistent with the assertions embodied in financial statements.
The cause of the conditions is the result of a failure to design and implement policies and procedures necessary to achieve adequate internal control.
Due to the size of the operation and the cost-benefit of additional personnel, it may not be feasible to achieve complete segregation of duties, the report stated.
The audit also found that misstatements in the financial statements were not prevented, nor detected and corrected by the court’s internal control resulting in proposed audit adjustments material to the financial statements.
The court’s internal control over financial reporting includes those policies and procedures that pertain to the court’s ability to record, process, summarize and report financial data consistent with the assertions embodied in financial statements, according to the report.
Material audit adjustments were necessary to correct misstatements in the financial statements, the audit stated.
Management’s response was that the court will implement policies and procedures to ensure that misstatements in the financial statements are able to be detected by the court’s internal control in order to prevent material proposed audit adjustments, according to the audit.