C.A.F.R., FY 2019-20 with continuing disclosure tables

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CITY OF PARIS, TEXAS Schedule of Findings and Questioned Costs (Continued) Year Ended September 30, 2020 Financial Statement Findings Significant Deficiency Finding 2020-01— Internal Controls Related to Bank Reconciliations Criteria: Accurate bank reconciliations should be performed and reviewed by management monthly. Condition: Internal controls were not properly implemented to reconcile items that should have been investigated and corrected in a timely manner on monthly cash reconciliations. Management did not review bank reconciliations prepared by finance department staff. Cause: Account reconciliations were not accurate in the clearing of outstanding items and were not properly reviewed by management to ensure accuracy. Effect: As a result of this condition, cash reconciliations misrepresented cash balance at year end. Recommendation: We recommend the City of Paris, Texas perform bank reconciliations addressing all outstanding items and that management review and approve reconciliations monthly. Any reconciling items should be investigated and corrected in a timely manner. Finding 2020-02 — Internal Controls Related to Calculation of Employee Insurance Criteria: Information updated in client spreadsheet should be verified for accuracy by management. Condition: Internal controls were not properly implemented to ensure accuracy of amounts used in spreadsheet to calculate employee portion of insurance expense. Cause: Spreadsheet values were not updated to reflect current rates. Effect: As a result of this condition, amounts withheld from employee checks were incorrect, leaving the City responsible for the expense. Recommendation: We recommend the City of Paris, Texas designate spreadsheet preparers and separate reviewers to ensure the accuracy of the amounts used in calculations. Finding 2020-03 — Financial Accounting and Reporting Criteria: The City's management should be responsible for preparing period -end financials including recording recurring and non-recurring adjustments to the financial statements. Condition: The City does not control the period -end financial reporting process including controls over procedures used to analyze transactions compromising general ledger activity and controls over recording recurring and non-recurring adjustment to the financial statements. Cause: Journal entries to adjust accounts to proper balance are not consistently recorded. Effect: As a result of this condition, the City lacks internal controls over the period -end financial reporting. Recommendation: We recommend the management of the City of Paris, Texas maintain close oversight of the accounting and period -end financial reporting process. Federal Award Findings and Questioned Costs The audit disclosed no findings required to be reported. 126