City of Worthington Hills Audit Report - Official City …

[Pages:26]REPORT OF THE AUDIT OF THE CITY OF WORTHINGTON HILLS

For The Fiscal Year Ended June 30, 2013

ROSS & COMPANY, PLLC

Certified Public Accountants

800 Envoy Circle

Louisville, KY Telephone (502) 499-9088 Facsimile (502) 499-9132



CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT.......................................................................................................1 STATEMENT OF NET ASSETS ................................................................................................................4 STATEMENT OF ACTIVITIES..................................................................................................................6 BALANCE SHEET - GOVERNMENTAL FUNDS.........................................................................................8 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS....................................................................................10 NOTES TO FINANCIAL STATEMENTS.....................................................................................................12 BUDGETARY COMPARISON SCHEDULES ...............................................................................................17 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ......................................21 COMMENT AND RECOMMENDATION.....................................................................................................24

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ROSS & COMPANY, PLLC

Certified Public Accountants

800 Envoy Circle

Louisville, KY Telephone (502) 499-9088

To the Mayor and Members of the City Commission Worthington Hills, KY

Independent Auditor's Report

We have audited the accompanying financial statements of the governmental activities and the major funds of Worthington Hills, Kentucky, as of and for the year ended June 30, 2013, which collectively comprise the City's basic financial statements, as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Basis for Disclaimer of Opinion

Management's monthly financial reports indicate a cash balance of $522,023 as of June 30, 2013, however we were unable to obtain sufficient audit evidence for $231,057 of the total. Management was unable to produce bank statements in support of this amount and a representative of the depository institution confirmed the account in question had a balance of $0 as of June 30, 2013. Further, the monthly financial reports indicate property tax revenue of $272,313; however management failed to respond to the auditor's request for supporting documentation thus we were unable to perform adequate tests of the accounting records to provide an opinion.

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INDEPENDENT AUDITOR'S REPORT Worthington Hills, KY (Continued)

Disclaimer of Opinion

Because of the significance of the matters as discussed in the Basis for disclaimer of opinion paragraphs, we do not express an opinion on the financial statements of the City of Worthington Hills for the financial year ended June 30, 2013.

Other Matters

The city has not presented the management's discussion and analysis information that the Governmental Accounting Standards Board (GASB) has determined is necessary to supplement, although not required to be part of, the basic financial statements. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis be presented to supplement the basic financial statements.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

The introductory section and accompanying supplementary financial information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying supplementary financial information as listed in the table of contents have not been subjected to the auditing procedures applied to the audit of the basic financial statements and, accordingly, we express no opinion on them.

Based on the results of our audit, we present the accompanying comment and recommendation included herein, which discusses the following report comment:

2013-01 The City of Worthington Hills Lacks An Adequate Segregation Of Accounting Duties

Respectfully submitted,

Ross & Company, PLLC Certified Public Accountants Louisville, KY July 3, 2015

CITY OF WORTHINGTON HILLS STATEMENT OF NET ASSETS

June 30, 2013

CITY OF WORTHINGTON HILLS STATEMENT OF NET ASSETS

June 30, 2013

ASSETS Current Assets:

Cash and Cash Equivalents Total Assets

NET ASSETS Restricted Unassigned

Total Net Assets

Governmental Activities

$

552,023

552,023

296,057 255,966

$

552,023

Page 4

The accompanying notes are an integral part of the financial statements.

CITY OF WORTHINGTON HILLS STATEMENT OF ACTIVITIES

For The Year Ended June 30, 2013

CITY OF WORTHINGTON HILLS STATEMENT OF ACTIVITIES

For The Year Ended June 30, 2013

Page 6

Program Revenues Received

Functions/Programs Reporting Entity Primary Government: Governmental Activities:

General Government Public Safety General Health and Sanitation Recreation and Culture Roads

Expenses

$ 87,543 41,171 108,550 38,746 31,071

Total Governmental Activities $ 307,081

Charges for Services

Operating

Capital

Grants and Grants and

Contributions Contributions

Net (Expenses) Revenues

Governmental Activities

$

$

$

$

(87,543)

(41,171)

(108,550)

(38,746)

42,850

11,779

$

$

42,850 $

$ (264,231)

General Revenues: Taxes Miscellaneous Revenues Interest

272,313 425 700

Total General Revenues and Transfers Change in Net Assets

Net Assets - Beginning

273,438 9,207

542,816

Net Assets - Ending

$

552,023

The accompanying notes are an integral part of the financial statements.

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