The Incline Village General Improvement District (IVGID) recently underwent a forensic due diligence audit due to concerns of potential fraud.
At the July 10th Board of Trustees meeting, the results of the audit were presented by RubinBrown, a Certified Public Accountants & Business Consultants Agency.
The report details a six-month review costing $400,000, and highlighted 41 observations; 16 ranked as high risk, 12 as moderate risk, and 13 as low risk, indicating pervasive issues throughout the organization.
The full [draft] report can be viewed here. You may watch the presentation and discussion from the meeting, starting at the 59:05 mark in this video.
“We see high risk of fraud and abuse until management represents an appropriate tone at the top to develop, maintain, and monitor an appropriate internal control environment.”
Thomas Zetlmeisl, a partner at RubinBrown
Another RubinBrown team member added:
“Overall we concluded there’s a high risk of fraud and abuse … we did not see any outright fraud.”
The report identifies areas for improvement within IVGID’s control environment, citing various internal control weaknesses. These issues range from transactional-level concerns to deficiencies in review and monitoring processes. Specific areas of focus include:
- Disbursement processes, with instances of no approver or self-approval
- Insufficient support for vendor disbursements
- Bank reconciliations not performed for multiple accounts
- Challenges with the implementation of a new accounting system
- A need for a more structured approach to financial controls
- High employee turnover
Recommendations made by the RubinBrown team include:
- Improve internal control environment and tone at the top
- Ensure proper implementation and controls in the Tyler Munis system
- Implement proper segregation of duties and approvals for disbursements
- Perform timely bank reconciliations
- Improve controls and oversight of procurement card usage
- Implement proper inventory tracking and counts
- Improve user access controls in point-of-sale systems
- Ensure Board approval is obtained before incurring project expenses
- Formalize processes for grants/donations and report to the Board
The forensic audit report was released to the public less than nine hours before the IVGID Board meeting, which meant neither the Board of Trustees or the public had sufficient time to review its contents before the presentation was given. The Board has requested time to thoroughly review the findings and submit questions to the RubinBrown team for further discussion.
This story is developing.