The Carillon - ONLINE EDITION
By: Jordan Ross
Posted: 01/23/2017 8:58 AM
A recent audit of the La Broquerie arena by a Winnipeg accounting firm has uncovered numerous concerns about the organization’s accounting practices in the 2015 fiscal year.
The concerns include what the report called "fraud risk factors" and "significant deficiencies in internal control" that left the organization vulnerable to both "credit risk and liquidity risk."
The undated report, prepared by BDO Canada LLP, began its section on fraud risk by outlining "a concern that cash receipts were not deposited into the bank of the organization." It went on to note that the board of directors were concerned that administration payments and other expenses "were not properly supported."
"These fraud risk factors indicate that fraud could happen in your organization," the section concluded.
The report then tackled weaknesses in internal controls. Pre-signed cheques were occasionally used, and rental and registration fees were sometimes collected in cash "without segregation of duties."
"Cheques were being signed and approved when there was no supporting documentation," the report stated.
The arena’s management also sometimes failed to follow the standard practice of independently reviewing invoices, mailing them out, and receiving payments via cheque. Instead, payment for unreviewed invoices was sometimes received at the arena.
The arena also had to pay penalties on several occasions after failing to pay its own invoices in a timely fashion.
On more than one occasion, payments were made without supporting invoices, which, the audit noted, "increases the risk of fictitious payments being recorded and the organization’s assets being misappropriated." One invoice for nearly $1,800 was paid twice, though the overpayment was later refunded by its recipient.
Arena management "were unable to provide appropriate supporting documentation for a large number of the transactions selected for audit," the report said.
Some of the arena’s general bookkeeping practices made it difficult for accountants to later reconcile the arena’s general ledger with its account balance. For instance, an October 2014 bank transfer of roughly $2,800 was not recorded, while other transactions listed in the general ledger never actually cleared the account.
However, the report qualified its concerns by stating that the questionable practices it identified were "discontinued" as of December 2015.
"Our comments are not intended to reflect upon the honesty or competence of the organization’s employees," the report added, and thanked Kristina Bergen, the current secretary treasurer of the arena board, who assumed her position in December 2015.
In mid-October of 2015 the arena board asked municipal staff to reconsider handling the arena’s books, minutes, and audit reports, and also requested a closed door meeting with council to discuss personnel issues.
Reeve Lewis Weiss could not be reached for comment. Jules Balcaen, who currently helms the La Broquerie Arena Committee, also declined to comment when reached by The Carillon.
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