TOWN OF LEWIS, NEW YORKLocal Government

2019-001 The Town?s general ledger software is not designed to account for multiple funds Condition and criteria: Internal controls should be in place to ensure that the Town?s accounting records and resulting financial statements are in conformity with accounting principles generally accepted in the United States of America. Context: During our audit we became aware that grants and funds are accounted for separately from the general ledger. These grants and funds include the youth commission, the capital project fund and the CBDG housing grant accounts. Cause: The Town?s general ledger software, a combination of QuickBooks and Excel is not designed for municipalities which account for transactions in multiple funds. Potential effect: Because the Town accounts for funds and grant projects transactions separately, there is the potential a fund or grant may exist and go unreported in the financial statements. Recommendation: We recommend the Town upgrade the accounting system to include these grants and funds.

2019-002 Accounting for capital assets Condition and criteria: Internal controls should be in place to ensure that the Town?s accounting records and resulting financial statements are in conformity with accounting principles generally accepted in the United States of America. Context: During our audit, we determined management has recorded certain general capital assets in governmental activities at current insurance value and, accordingly, has not recorded depreciation expense on those assets. Cause: The Town is not in conformity with GASB 34. Potential effect: Accounting principles generally accepted in the United States of America require that those general capital assets be capitalized at cost and depreciated, which would increase the assets, net position, and expenses of the governmental activities. The amount by which this departure would affect the assets, net position, and expenses of the governmental activities has not been determined. Recommendation: We recommend the Town account for certain general capital assets in the governmental activities in accordance with accounting principles generally accepted in the United States of America which require that those general capital assets be capitalized at cost and depreciated.