WINDHAM REGIONAL COMMISSIONLocal Government

2019-1 Reconciliation of Significant General Ledger Accounts Criteria: Reconciliation of all significant accounts should be performed timely in order to provide management with accurate data upon which results can be evaluated. Conditions and Context: Management of the Commission was unable to provide an analysis and supporting documentation for several material general ledger balances. We noted that subsequent to September 30, 2019, that reconciliations of certain significant general ledger balances were not performed. Effect: Unreconciled accounts may lead to undetected errors over extended periods of time. Recommendation: Every effort should be made to reconcile all material accounts on a monthly basis. Response: Reconciliation of significant general ledger accounts is one of the principal job functions of the Finance Manager. These reconciliations and the related support are being prepared monthly. They are then approved by the Executive Director on a monthly basis as well as quarterly by the Windham Regional Commission Treasurer. Windham Regional Commission is making a gradual transition to a different accounting and financial management software platform, QuickBooks, which will provide a more efficient means by which to reconcile all significant general ledger accounts.

2019-2 Special Revenue Fund Transactions Condition: Accounting personnel did not record transactions related to the Commission?s Revolving Loan Fund during the year ended September 30, 2019. Criteria: Transactions should be recorded in the accounting system as they occur. Effect: Year-to-date activity in the revolving loan funds were not recorded and resulted in additional time necessary by management to record the resulting transactions before completing the audit. Cause of Condition: Lack of proper internal controls over transactional processing. Recommendation: The Commission needs to ensure that all transactions related to all funds be recorded into the appropriate general ledger fund and general ledger accounts. Response: The Commission will follow this recommendation by creating additional general ledger accounts reflecting the activities for all revolving loan fund activities. The Commission has established internal controls over transactional processing. With guidance from our audit firm, a document has been provided which will track the amortization and monthly activities for each loan providing a beginning point for record keeping.

2019-3 Financial Statements Condition: Accounting personnel did not prepare financial statements prepared in accordance with generally accepted accounting principles. Criteria: Financial statements prepared in accordance with generally accepted accounting principles should be prepared. Effect: Year-end financial statements were not prepared resulting in a significant deficiency and the expenditure of additional accounting and auditing fees. Cause of Condition: Lack of proper internal controls over financial reporting. Recommendation: The Commission should consider hiring someone or contract with someone who can perform this function or accept future significant deficiencies findings. Response: The Commission hired a new Finance Manager in August, 2019 who is working with the Executive Director, other senior staff, and the Executive Board to develop a comprehensive and resilient approach to financial management, including the preparation of financial statements. As of February 5th, 2020, the Commission put in place Finance Management Procedures, which were approved by the Executive Board on February 11th, 2020. The focus is on improving internal controls while also designing a system that is not dependent upon one person to understand and perform all financial management responsibilities for the organization. Windham Regional Commission will consider retaining additional bookkeeping services before FY20 year end to continue our work on transitioning to a different bookkeeping and financial management software platform, QuickBooks

2019-4 Brownfields Assessment and Cleanup Cooperative Agreements, CFDA No. 66.618; Grant period ending September 30, 2019 Condition: Duplicate draw downs were made in the amount of $61,624.56 and $61,875.40 during the year ended September 30. 2019 in payment of vendor costs. Criteria: Individual drawdowns should be reviewed and approved by responsible official before a request is made and that the amount of the drawdown be supported by adequate documentation. Cause: Existing internal controls over requests for drawdowns was determined to be ineffective. Effect: Excess amounts of Brownfields loans and grant were not available for other projects. Context: Upon review of EPA drawdowns, it was determined that two different drawdowns had been withdrawn twice. On February 11, 2020, the Commission refunded the $61,875.40 to the EPA. The Commission did not refund the $61,624.56 but is using these funds in lieu of additional drawdowns. Recommendation: The Commission should have all requests for EPA funds, as well as other funds, adequately supported by documentation and reviewed and approved by a responsible person before making such requests. Views of Responsible Officials and Planned Corrective Actions: The duplicate drawdowns were an error that would have been caught had the WRC brownfield program project manager also been involved in the fund?s drawdown process. That was not the custom when the errors occurred and having learned from this mistake, we have updated our Finance Management Procedures. The corrective action taken now requires that the project manager, the Finance Manager, and the Executive Director review all funding drawdown requests, and the Finance Manager, the Executive Director, and Associate Director review all deposits. These procedures should eliminate all opportunity for any such error to occur again.