CITY OF LA GRANGE

December 28, 2022 To whom it may concern: The City of La Grange submits the following correction action plan for the fiscal year ending June 30, 2021. Name and address of independent public accounting firm: RFH, PLLC, 300 W. Vine Street Suite 800, Lexington, KY 40507 Audit Period: Fiscal year ending June 30, 2021 Finding 2021-001 The City should have internal controls in place that enable it to accurately record all transactions including year-end accrual transactions. Recommendation: We recommend management review the costs and benefits involved to retain a consultant with the required expertise to advise the City during the year concerning non-routine transactions and to assist the City with its year-end close so that the City?s accounting records will be in compliance with generally accepted accounting principles. Action taken: In the past, books were reconciled and at the end of the year, reports were given to the CPA for the year-end adjustments. Currently, management is seeking to hire a part-time consultant to assist the current staff with the non-routine transactions, as well as the year-end close. The current staff also plan to obtain proper training to further their skill level relating to the year-end accrual transactions. Status: The City is working on resolving this finding and expect it to be resolved in the fiscal year 2023. Finding 2021-002 The City should have internal controls in place that enable it to prepare complete financial statements. Recommendation: We recommend management review the costs and benefits involved to retain a consultant with the required expertise to prepare the financial statements or review the financial statements as prepared by the auditor for compliance with generally accepted accounting principles. Action taken: Management is currently seeking to hire a part-time consultant to help the current staff prepare and review the financial statements as prepared by the auditor. The current staff plan to obtain more training on the new accounting software. Status: The City is working on resolving this finding and expect it to be resolved in the 2023 fiscal year. Finding 2021-003 The City should have internal controls in place to ensure bank accounts are reconciled timely. Recommendation: We recommend the City establish internal controls to ensure the City?s bank accounts are reconciled to the accounting system monthly. If City personnel encounter issues with reconciling a specific bank account to the accounting system, the City should consider hiring a consultant with sufficient expertise to help complete the reconciliation. Action taken: The City personnel plan to continue their training with the new financial program to further their skill level. Management is currently seeking to hire a part-time consultant to be able to aid the current staff with reconciling the City?s bank accounts monthly. Status: The City is working on resolving this finding and expect it to be resolved in the 2023 fiscal year. Finding 2021-004 The City should have internal controls in place to ensure the Mayor and the City Council are provided with accurate up to date financial data monthly. Recommendation: We recommend the Mayor and the City Council receive up to date monthly budgetary comparison reports to assist in making appropriate financial decisions and to assist in evaluating the overall financial position of the City. Action taken: Management is currently seeking to hire a part-time consultant to assist current staff in making sure the Mayor and City Council are provided with accurate and up-to-date financial data. Status: The City is working on resolving this finding and expect it to be resolved in the 2023 fiscal year. Finding 2021-005 ? AL 10.559 - The City should timely file all required financial reports with the state and the U.S. Office of Management and Budget (OMB). Recommendation: We recommend the City implement the changes from the above itemized findings to allow timely completion of accurate financial reports. This will allow the City to be in compliance with the laws and regulations that govern them. Action taken: The City has filed all required reports with the state and OMB. Status: Resolved as of the date of this submission. Finding 2021-006 City personnel should ensure all deposits are fully insured or collateralized in accordance with KRS 66.480. Recommendation: We recommend City personnel check on the status of insurance and collateral coverage for the City?s deposits periodically during each fiscal year. This will allow the City to be in compliance with KRS 66.480 in the future. Action taken: City clerk receives monthly financial statements on collateral and will make sure funds are either fully insured or adequately collateralized. Status: Resolved as of the date of this submission. Implementation date: December 28, 2022 Persons responsible for implementation: Stephanie Cooper, City Clerk and Mayor John Black