An accounts payable audit was recently completed on the city of Sturgis, South Dakota, according to a notice of audit obtained by the Meade County Times-Tribune.
Budgetary overdrafts that violated state law were found in six departments, the largest of which were more than $23,000 accrued by general government expenses and $19,550 for capital improvements at the local airport, overseen by the public works department. The AP audit recommended that the city "complete supplemental appropriations for unbudgeted expenditures" in the future.
Material audit adjustments were proposed to decrease reported net income by $264,518. These included accounts payable and receivable, garbage collection revenue, and adjusting fund balance, the news source reports.
Additionally, an annual review of expenses and accounts payable was suggested to ensure the proper inclusion of capitalized assets in the correct accounts.
AP audits can be beneficial to cities and organizations in several ways. In addition to confirming assets are being managed correctly, they can identify instances in which funds have been misappropriated, either unintentionally or as part of an embezzlement scheme. For example, a recovery audit for the Indiana town of Merrillville found that its former town clerk, Virlissa Crenshaw, diverted more than $310,000 in cash and surety bonds.