Monday, October 16, 2017 - 4:30 PM

Initial Findings in Mile One Audit

In mid-June, City Council announced that the City’s Internal Auditor would be investigating Mile One’s accounting processes from January 2012 to December 2016 in relation to an unexplained cash shortage exceeding $100,000. Today, Mayor Danny Breen shared an interim update on the progress of the investigation.

“In March management at Mile One noted a discrepancy between the cash counts in food & beverage areas and the amount recorded in the accounting records," explained the Mayor “This led to a request for the City’s Internal Auditor to verify the correct total and to identify and make recommendations to resolve any internal control weaknesses that may have led to the apparent loss.”

To date, an in-depth review of thousands of documents over a five year period has been conducted. Initially, the loss was believed to be $114,863.40; however, at this point in the review the unexplained cash shortage is $58,089.05.

“The Auditor has informed Council and the St. John’s Sports and Entertainment Board that a number of errors and omissions in the coding of accounting entries over a five-year period incorrectly increased the balance in the accounting records by $56,000,” explained the Mayor. “The primary issue was in the floats/petty cash account, which was only reconciled annually, leading to a situation in which management mistakenly believed that the variances noted between the physical cash count and the accounting records were the result of timing issues.”

The review has revealed numerous internal control weaknesses related to cash controls which will be further reviewed as the Office of the City Internal Auditor continues its work at Mile One Centre. 

“I am pleased to see that Mile One management have already begun the process of improving the internal control structure, especially as it relates to access to cash and the reconciliation process, but there is still work to be done.” said the Mayor.

The City’s Office of the Internal Auditor will now perform a detailed review of the cash handling and reconciliation processes as well as to follow up on the other side of the accounting errors to ensure that they are properly coded and that no other issues were created as a result of the miscoding.  Once this work is finished a final report complete with recommendations for improvement will be prepared.