The City of Kalona had two minor blemishes on its audit according to city administrator Ryan Schlabaugh.

Schlabaugh presented the results of the audit conducted by Gronewold, Bell, Kyhnn & Co., an accounting firm in Atlantic, at the city council’s May 5 meeting.

The first problem was the record keeping of bond proceeds, which Schlabaugh said the city needed more guidance on. Currently, the city’s underwriting company takes its percentage off of bond proceeds before sending the money to the city, meaning the city never actually makes a direct payment within its software and banking systems. The audit company said it wants accounting for that percentage, but Schlabaugh and city clerk Sarah Chmelar said that their current system only tracks transactions for which the city actually sees money come in or out.

The second mark on the audit was segregation of duties, a common problem for cities of Kalona’s size. Iowa State describes segregation of duties as a fraud-preventing measure in which the same person is not allowed to initiate, approve, and review the same action, but the limited staff of small towns like Kalona often makes properly distributing different parts of payment and receipt processes difficult.