The town of Paonia, Colorado, is making changes to its accounting procedures after an accounts payable audit revealed that more than $200,000 had been misappropriated by a former employee.
The Delta County Independent reports that the investigation looked at the municipality's 2010 financial records and discovered a lack of checks and balances within the accounting department. The AP audit suggested that internal controls needed to be improved, as it was found that the town's finance officer could perform a variety of accounting tasks without authorization.
Additionally, accounts payable, payroll liability and combined cash accounts were not reconciled in 2010. This activity could have led to the financial loss, as records did not receive proper oversight. Paonia is now looking to recover the missing funds from its insurance carrier. Changes have already been implemented, including procedures that require the accounting department to obtain the approval of larger transactions from the town's finance committee.
The news source reported that late last year, Paonia officials were concerned about the length of time it was taking for the audit to be completed. The Office of the State Auditor said the delay was due to the large amount of grant money the town received in 2010.