Bellevue

SCHEDULE OF FINDINGS YEAR ENDED JUNE 30, 2025 Part I: Findings Related to the Financial Statements: MATERIAL WEAKNESSES: 2025-001 Segregation of Duties Criteria - Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losSes from employee error or dishonesty and maximizes the accuracy of the City's financial statements. Condition - We noted that the individual who reconciles the City's checking account is also authorized to sign checks. The result is that intentional or unintentional errors or unauthorized transactions could occur and not be detected in a timely manner. Cause - The City has a limited number of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions and processes. Effect - Inadequate segregation of duties could adversely affect the City's ability to prevent or detect and correct misstatements, errors or misappropriation on a timely basis by employees in the normal course of performing their assigned functions, Recommendation - We realize segregation of duties is difficult with a limited number of officeemployees. However,theCityshouldbeawareofthepotentialforproblemsresulting from a lack of segregation of duties and should consistently look for ways to improve the City's internal controls. We recommend the bank statements be delivered directly to the Mayor for review before being given to the individual responsible for the account reconciliations. Views of Responsible Officials and Planned Corrective Action - We believe we are doing everything possible to segregate duties. The Mayor is reviewing bank statements first. The Assistant City Clerk is the first staff to prepare vouchers and print checks, the Secretary and City Administrator/Clerk then will sign the checks, and the City Administrator/Clerk remains in charge of reconciling the checking account. Conclusion - Response accepted. - 47 ### Page 53 CITY OF BELLEVUE BELLEVUE, IOWA SCHEDULE OF FINDINGS YEAR ENDED JUNE 30, 2025 Part I: Findings Related to the Financial Statements: (Continued) 2025-002 Adiusting Journal Entries Criteria - A deficiency in internal control over financial reporting exists when the design oroperation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements of the financial statements on a timely basis. Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the City's financial statements. Condition - Adjusting journal entries were proposed to management to represent a fair presentation of the City's financial statements at June 30, 2025. Several adjustments weremade to correct the recording of interfund transfers and loan payments in the TIF, Debt Service, Water, Electric, and Electric - Capital Equipment Funds. These adjustments affected the ending balance of the various funds as follows:TIF Debt Service Woter ElectriC Electric - Capital Eq uipment $ (77,709) 77,709 85,000 (15,000) (70,000)Cause - Duplicate or incorrect entries were recorded. Effect - Misstatements in the financial statements could impair management and the City Council's ability to make informed decisions. Recommendation - Management should review transfers to ensure all financial information is recorded properly within each fund. Views of Responsible Officials and Planned Corrective Action - This will be done goingforward. Conclusion - Response accepted. INST ANCES OF NONCOMPLIANCE: No matters were noted. - 48 ### Page 54 CITY OF BELLEVUE BELLEVUE, IOWA SCHEDULE OF F INDINGS YEAR ENDED JUNE 30, 2025 Part II: Other Findings Related to Required Statutory Reporting:2025-A Certified Budget - Disbursements during the year ended June 30, 2025 exceededthe amount budgeted in the debt service function. Chapter 384.20 of the Code of Iowa states, in part, "Public monies may not be expended or encumbered except under an annual or continuing appropriation." Recommendation - The budget should have been amended in accordance with Chapter 384.18 of the Code of Iowa before disbursements were allowed to exceed the budget. Views of Responsible Officials and Planned Corrective Action - The budget will be amended in the future, if applicable. Conclusion - Response accepted. 2025-B Questionable Disbursements - We noted no disbursements that may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979. 2025-C Travel Expense - No disbursements of City money for travel expenses of spouses of City officials or employees were noted. 2025-D Business Transactions - No business transactions between the City and City officials or employees were noted. 2025-E Restricted Donor Activity - No transactions were noted between the City, City officials, City employees and restricted donors in compliance with Chapter 68B of the Code of Iowa. 2025-F Bond Coverage - Surety bond coverage of City officials and employees is in accordance with statutory provisions. The amount of coverage should be reviewed annually to ensure that the coverage is adequate for current operations. 2025-G City Council Minutes - No transactions were found that we believe should have been approved in the City Council minutes but were not. 2025-H Deposits and Investments - No instances of noncompliance with the deposit and invest'inent provisions of Chapter 12B and 12C of the Code of Iowa and the City's investment policy were noted. 2025-I Revenue Notes - No instances of non-compliance with the revenue note resolutions were noted. - 49 ### Page 55 CITY OF BELLEVUE BELLEVUE, IOWA SCHEDULE OF FINDINGS YEAR ENDED JUNE 30, 2025 Part II: Other Findings Related to Required Statutory Reporting: (Continued) 2025-J Annual Urban Renewal Report - The Annual Urban Renewal Report was properly approved and certified to the Iowa Department of Management on or before December 1 as required by Chapter 384.22(2)(a) of the Code of Iowa. However, the beginning cash balance of the Special Revenue, TIF Fund reported on the Levy Authority Summary did not agree with the City's general ledger. Also, the receipts and disbursements of the TIF Fund were understated on the Levy Authority Summary. Recommendation - The City should ensure cash balances, receipts and disbursements reported on the Levy Authority Summary agree with the City's records. Views of Responsible Officials and Planned Corrective Action - This will be done going forward. Conclusion - Response accepted. 2025-K Tax Increment Financing - The Special Revenue, Tax Increment Financing (TIF) Fund properly disbursed payments for TIF loans and rebates. Also, the City of Bellevue properly completed the Tax Increment Debt Certificate Forms to request TIF property taxes. 2025-L Telecommunications Services - No instances of non-compliance with Chapter 388.10 of the Code of Iowa were noted. 2025-M AnnualFinancialReport-Chapter384.22oftheCodeofIowarequirestheCity's Annual Financial Report (AFR) contain a "summary for the preceding fiscal year of all collections and receipts, all accounts due the city, and all expenditures..." The City's Annual Financial Report reported receipts, disbursements and fund balances which do not agree with the City's records. Recommendation - The City should ensure future Annual Financial Reports agree with the City's records. Views ofResponsible Officials and Planned CorrectiveAction-This will be done going forward. Conclusion - Response accepted. 50 -