The Northport Leelanau Township Utilities Authority (NLTUA) voted 4-1 on Nov. 21 to approve a resolution to create a deputy treasurer position effective this week.
The NLTUA operates the municipal sewer system within the village and the township, and the position would separate accounting duties within the office. The resolution establishes that the NLTUA board shall create an office for a deputy treasurer housed in the office of the Leelanau Township treasurer, which is currently held by Denise Dunn.
“In the last couple of (annual) audits, it’s been identified as a material weakness. It’s not that anything has happened or anything brought to our attention that should happen, but it’s a precautionary type thing,” said Leelanau Township Supervisor and NLTUA Chair Mike McMillan at the NLTUA November meeting. “It’s good governance and you need to look at it from an audit standpoint.”
The deputy treasurer shall create an accounts receivable checking account at Huntington Bank in Northport, with the purpose of the account being to deposit payments received from the utilities user for users operations. The village of Northport debt retirement and Leelanau Township debt retirement will distribute the received funds in a timely manner to the appropriate entities.
The NLTUA board will also establish a subcommittee to write a job description for the NLTUA deputy treasurer and revise the job description for the NLTUA clerk.
“I think the resolution should really reflect what the audit said and it was the segregation of accounting duties which was the problem… They (the auditor) reached that conclusion and you have to deal with that conclusion regardless of whether you agree with that or not,” said Village of Northport Manager Jim Dyer at the meeting. “The deficiency that they found was that to some extent, because we don’t have a CPA on staff, and we were using an audit firm… It was the separation of functions between accounts receivable and accounts payable that they found this material weakness.”
In the last 2022 audit completed by Dennis, Gartland, and Niergrath, the segregation of duties was highlighted as a deficiency in the NLTUA internal system due to the limited size of staff. Without an adequate segregation of duties, the audit explains that there is an increased risk that errors or fraud could occur and not be detected. The audit continued, stating that it considered the “preparation of financial statements” as a significant deficiency in internal control.
