An internal audit has found some major accounting woes in the City of Brotherly Love. An audit report, released Tuesday by City Controller Rebecca Rhynhart, cites $924 million in accounting errors last year alone. The city is also missing $33 million from its main bank account, a discrepancy that came to light earlier this year. Even worse, the city can’t say for sure if the missing funds are the result of fraud or just bookkeeping errors.
The audit report faulted the city’s accounting system as susceptible to fraud, with too few accountants, poor controls, and outdated technology. The audit of the city’s fiscal 2017 books found two “material weaknesses” and eight “significant deficiencies.” The system also suffers from lack of separation of duties and doesn’t maintain independence for the auditors. Rhynhart says the finance department improperly relies on auditors from the controller’s office to reconcile the city’s books. The city’s financial officials are conducting an investigation and will issue a report in November.
