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CITY OF SAN LEANDRO <br />MEMORANDUM ON INTERNAL CONTROL <br />SCHEDULE OF PRIOR YEAR SIGNIFICANT DEFICIENCIES <br />2016-01 Year-End Close <br />Criteria: Management is responsible for the accuracy of the financial statements and the <br />maintenance of the general ledger system and other records used to prepare the financial <br />statements. Timeliness of the financial statements is key to a best practices approach in providing <br />policy makers the year-end financial results soon enough to be useful and to meet filing <br />deadlines. <br />Condition: The City provided approximately forty post-closing adjusting journal entries which <br />resulted in a delay in the timely completion of multiple financial statement items primarily <br />including cash and investments and capital assets. <br />Cause: The City has experienced staff turnover during fiscal year 2015-2016 and as a result fell <br />behind in the completion of the year-end close process. <br />Effect: Without adequate staff resources to ensure that the year-end closing was completed <br />properly and accurately, there is an increased risk that material misstatements of the City’s <br />financial statements will not be prevented, or detected and corrected on a timely basis. <br />Recommendation: The City’s fiscal year end closing process and journal entries associated with <br />the close should be completed and posted prior to the commencement of fieldwork. Staff should <br />plan accordingly to ensure that a complete close of the books is performed prior to scheduling <br />auditors to perform fieldwork. <br />Current Status: Implemented. <br />8496