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CITY COMMISSION AGENDA ITEM |
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Department: |
Finance |
Commission Meeting Date: 12/19/2017 |
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Staff Contact: |
Bryan Kidney |
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Receive Report of Miscellaneous Billing Process Review Project Update |
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Executive Summary: |
In April of 2017, the Finance Department became aware of land lease agreements held by the City that were not being billed. The City Manager directed staff to engage an auditor to determine the extent of problem.
Engagement of Auditor Finance Director engaged RSM for Rapid Assessment services on April 24. RSM began their two-day on-site review on April 25. During this time RSM reviewed policies, procedures, process and workflow related to Billing & Cash Applications for Non-Utility billings.
Result of Rapid Assessment The Auditors found deficiencies in multiple areas of the receivable operations. RSM presented these in a report to the Governing Body on Tuesday, June 6.
Accounts Receivable further review based on rapid assessment Based on the finding of the Rapid Assessment, staff entered into an agreement to have RSM assist with verifying that all City properties were billed appropriately.
The attached memo provides more detail and an overview of the process and status. A PowerPoint presentation will be given by the RSM accounts receivable reviewer 12/19/17.
Summary of Findings There were 23 customer accounts discovered with billing errors. The total billing variance for those accounts was $690,045: · Two Building leases $2,006 · Nineteen Hangar rents $4,008 · One land lease $256,096 · Douglas County two payments $427,935 Of the $690,045 variance, $689,108 has been collected. Due to limitations within the MAR billing system, Billing is not able to implement all of the suggestions from the assessment. A few examples: workflows, reminders, approval automation and automated reconciliations. Finance has been making improvements to the Accounts Receivables process over the last year. Staff is also working to implement controls and training for staff as recommended by RSM. A long left vacant full time employee Administrative Support position was approved and filled to help address the short staff concern regarding Accounts Receivable. Account Receivable policies and procedures have been drafted. The City Manager’s Office is working on process and procedure improvements to ensure that agreements and other agenda items with MAR items are properly routed to finance to ensure they are set up as accounts receivable. |
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Strategic Plan Critical Success Factor |
Effective Governance/Professional Administration Sound Fiscal Stewardship |
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Fiscal Impact (Amount/Source): |
The estimated total cost of the project including services to date is $54,313. The review was included in the 2017 revised budget in the General Fund Overhead department. The cost of the assessment service is offset by the $689,108 in past revenue that has been collected so far through this review. The recovered revenue of the Airport leases will return to Airport Fund 201 and rest of the recovered revenue will return to the General Fund 001. |
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Attachments: |
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Reviewed By: (for CMO use only) |
☐TM ☐DS ☒CT ☐BM |