VILLAGE OF WYOMING

CORRECTIVE ACTION PLAN March 1, 2020 The Village of Wyoming (The Village), New York respectfully submits the following corrective action plan for the year ended May 31, 2020. Karen Lacey, Clerk/Treasurer, is the person responsible for the corrective action listed. Name and address of independent public accounting firm: Freed Maxick, CPAs, P.C. One Evans Street, Batavia, NY 14020 Audit period: June 1, 2019 to May 31, 2020. The findings from the May 31, 2020 findings and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. FINANCIAL STATEMENT FINDINGS 2020-001 Financial Accounting and Reporting Observation: At the present time, capital asset records are not maintained in their entirety by the Village and, therefore, could not be properly reported in accordance with U.S. GAAP in the Village?s government-wide financial statements. Obtaining capital asset information would allow for controls to be established to safeguard these assets. Better assessment and evaluation could also be made regarding the reliability of certain capital assets and the need for replacements, etc. During the audit we noted that employee benefit expenditures had not been allocated between the General and Water Funds to align with the respective payroll charged to each fund. As part of the audit process, we identified and recommended various audit adjustments, that were required, to ensure the financial statements were presented fairly and in accordance with U.S GAAP. The audit adjustments were required to account for yearend accruals and activity relating to the water capital project. The total of these adjustments was material to the Village?s financial statements and, had they not been recorded, the financial statements would have been materially misstated. Recommendation: We recommend that the Village maintain detailed capital asset records and conduct a periodic inventory of these records on a timely basis to safeguard these assets and ensure accurate accounting for capital assets. Also, we recommend that the Village budget, allocate and record payroll and related benefit costs within the General and Water Funds consistent with the time spent by employees on activities within each of these funds. To ensure the accuracy of the Village?s financial reporting, we recommend all audit adjustments be recorded upon completion of the audit. Also, we recommend the Village perform a thorough review of receipt and disbursement activity subsequent to yearend, to ensure all appropriate accruals are accounted for in accordance with U.S. GAAP. In addition, we recommend that the Village monitor all capital project and grant activity and determine that it is recorded in the appropriate fund. Action Taken: The Village of Wyoming will maintain a detailed capital asset record and conduct an annual review of that record, updating when necessary. The Village of Wyoming will budget benefit costs between the Water Fund and General Fund benefit costs. 2020-002 Financial Oversight and Monitoring Observation: During our audit, it was noted that there is no review and approval of bank statements, bank reconciliations, and journal entries prepared by the Clerk/Treasurer. This provides an ineffective system of controls, because it permits the possibility of errors, either intentional or unintentional, to occur, due to the lack of an adequate segregation of duties and oversight. Recommendation: We recommend the Village design sufficient internal controls to provide the proper oversight regarding the Village?s financial reporting and related activities. Internal controls are designed to safeguard assets and help prevent losses from employee errors or potential fraud. Without these controls the Village is at a much greater risk. We recommend that management evaluate the accounting system and the roles and responsibilities of personnel and segregate as many of the accounting functions as possible or implement mitigating controls. We recommend that an employee independent of cash receipt and disbursement activities review and approve the bank statements and related bank reconciliations. We also recommend that review and approval of all manual journal entries occur by an individual independent of the process. Action Taken: The Village has already implemented the approval of bank statements, bank reconciliations as of the Village Board meeting, December 8, 2020. In addition to that the Village Board will review and approve all manual journal entries as of March 9, 2020 Village Board meeting. III. FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2020-003 Established Village Policies and Procedures - Noncompliance Observation: The Village has not established written investment procurement, code of ethics or conflict of interest policies as required by General Municipal Law Sections 39 and 104-b and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Sections 200.112, 200.317-200.326. In addition, it is required per New York State Office of the State Comptroller that these policies are reviewed and approved annually. Lack of formally adopted procurement policy could make the Village susceptible to the risk that purchases occur that are not properly authorized. A code of ethics outlines professional standards expected of board members and employees and establishes expectations of behavior. A conflict of interest policy establishes procedures under which individuals who have conflict of interest are excused from voting on such matters and may serve to protect board members from the appearance of impropriety. The lack of a code of ethics and conflict of interest policy could increase the risk of unethical behavior. Recommendation: We recommend that the Village establish written policies and procedures surrounding investment activity, procurement, conflicts of interest and code of ethics to ensure compliance with the Uniform Guidance and GML. Action Taken: The Village will establish policies for Investments, Code of Ethics, Conflict of Interest and Procurement. Additionally, the Village will create a procedure in which an annual review of these policies is performed so that any necessary updates are completed.