HomeMy WebLinkAbout5/20/2025 Item 6h, Jackson and Malicoat - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 20, 2025
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
Prepared By:Debbie Malicoat, Deputy Finance Director/City Controller
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6h – FY 2023-24 SINGLE AUDIT
Staff received the following question, regarding the FY 2023-24 Single Audit. The
question is below with staff’s response shown in italics:
1) It seems that the one remaining issue related to journal entry approval is
about “approval for system-generated adjusting entries, which are currently
posted automatically.” All manual entries now have a workflow that allows
for oversight/approval per the recommendations of the Auditor. Is that
correct? If so, can you give an estimate of the size of the issue still
remaining? In other words, are these system-generated adjusted entries a
majority of all entries, or a smaller percentage compared to manual entries?
It is correct that the City has approval controls for manual entries to allow for
oversight and approval.
The remaining issue is that the system generates adjusting entries when certain
corrections are made to payables transactions. These entries are not uncommon,
and it is estimated that they represent a very small percentage of total transactions
(probably less than 1% of transactions). Unfortunately, there is not a way for the
system to automatically route those journal entries through an approval
process. To compensate for this, staff has created a report that will identify the
transactions after the fact and automatically route the report to a supervisor for
review. This will satisfy the Auditor’s concern that there previously had not been
any review of these types of transactions. Use of the report creates an internal
control that provides assurance that when these corrections are made to payables
transactions, there is oversight and review and this audit finding should be resolved
in next year’s report.