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CITY OF DUBLIN
DUBLIN, CALIFORNIA
MANAGEMENT LETTER
JUNE 30, 1996
Vavrinek, Trine, Day & Co.
(:ertifit'd PlllJli( ,\CCOllnl<llllS
EXHIBIT 5
Item 4.2
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Cimy T Cicllella. CPA
Donald A. Driftmier. C.PA
e>rcgory P. COUK. <':.I'A
Dennis 1\. Pringie. <.: 1',,\
I{on S. While, C."A
I {Oy .1. Blair, e.l'..\
.Idfr<.y A. carl<.:r, ("I'A
Kmen Wilite. <.: J"A
Vavrinek, Trine, Day & Co.
(:crtilicd j)l!blic An'ountants
Lindil S. Todd. <:.I'i\,
C. Torn Nelsun. C!',A
Kevin T pulliwn. <.: !'A.
Ileidi E, Hoss. <.: I'A
Thomas A. Ilrewer, C.PA.
David L. Dayton. (',I'A
Ji.1Tllt:>S RCl!S:i:"1no. principal
.Jerf ^. Wenger, Prindpill
Chilrlm; 1.1. (;idow, .Jr., Consul Ian I
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Mcnlt)Crs:
. Arnericillllnstitllte of Certified F'uhli(" AC("(HHllanls
. Sl.-,C t-'r~}{"ti('c SC( 'tioTl
. (:i,lilornii, S()("i('ly of C('rlifi('d Jlllblir /\CCount.ullts
. W('sl('rn /\.ssoe;[r.ll[on ()f ^('COUlltillg Finns
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October 8, 1996
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City of Dublin
City Council Members
Dublin, California
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Dear City Council:
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In planning and performing our audit of the general purpose financial statements of the City of Dublin
for the year ended June 30, 1996, we considered the City's internal control structure to determine our
auditing procedures for the purpose of expressing an opinion on the general purpose financial statements
and not to provide assurance on the internal control structure.
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However, during our audit we became aware of certain matters that are opportunities for strengthening
internal control and operating efficiency, This letter summarizes our comments and suggestions
regarding those matters.
Electronic Data Processing (EDP)
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FindinlZ
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Although the City has procedures in place for the storage of backup tapes for the computer system, a
complete disaster recovery plan has not been developed.
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Recommendation
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An information systems disaster recovery plan helps to ensure that an organization can recover after an
interruption in computer services, As noted above the City backs up their computer system and stores
the files off site. However, a comprehensive plan to address recovery has not been written. Such a plan
can be incorporated in the City's contingency plan. It should include recovery steps, key personnel
listings, vendor contracts, and inventory. The plan should be tested annually, and should be reviewed for
adequacy on an annual basis.
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K270 Aspen Streel . Rilncllo Cucamonga, CA 91730
P.O. Box 4407. nanctJo Cucarnonga. CA a] 72D.4407
(909) 4GG44 I 0 · l-'AX (DOD) 4(iG.44:11
With Offices IIJCillecl: Fresno
f>l~asmllon
Lilguna ] lills
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City of Dublin
October 8, 1996
Page 2
Dublin Information Inc.. Enterprise Fund
FindinlZ
Dublin Infonnation Inc.(DFI) is currently presented as an enterprise fund in the annual audit report. An
enterprise fund is nonnally used when the fund is to be administered as a business. This business would
then require the full accrual method of accounting versus the modified accrual method of accounting
used for a governmental fund type. At the present time the activities accounted for in this fund do not
lend themselves toward the enterprise fund presentation.
Recommendation
The City should review the fund classification of Dublin Infonnation Inc. to detennine what the intent of
the City is in regards to the use of the property owned by Dublin Infonnation Inc. Based upon this
review the City should consider the proper accounting treatment. This should then be documented to
support the accounting methods used to account for DF!.
Fixed Assets
FindinlZ
The system used to account for the fixed assets of the City should be updated to allow the City the ability
to print complete listings of all assets owned by the City. The system should also have the ability to print
only current year additions, deletions, and disposals.
Recommendation
The City has begun to update the fixed asset accounting system. The City should continue in its efforts
to implement the new accounting software, and the development of internal controls regarding the fixed
asset inventory. Once the internal controls are in place for the new system the City should consider
taking an annual inventory of all fixed asset equipment.
Public Works
FindinlZ
We noted that the flow of infonnation from the public works department to the fmance department is not
sufficient regarding various program funded activities. The public works department is responsible for
tracking expenditures relating to some of the federal and state funded programs. This infonnation
relating to the grant invoices, and 'detail to support these invoices is not forwarded to the finance
department on a timely basis.
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City of Dublin
October 8, 1996
Page 3
Recommendation
A system should be established to ensure that all accounting information is forwarded to the fmance
department for all fmance related items. The finance department should also review all claims submitted
to the granting agencies to ensure that the claims agree to the fmancial records. These claims and copies
of all supporting documents should be maintained for audit purposes.
We will review the status of these comments during our next audit engagement. We have already
discussed these comments and suggestions with City personnel, and we will be pleased to discuss them
in further detail at your convenience, to perform any additional study of these matters, or to assist you in
implementing the recommendations.
Yours very truly,
)Lr~
Kevin T. Pulliam
of V A VRlNEK., 1RINE, DAY & CO.
KTP:dmo