NORWAY — An independent audit of the town’s financial records showed no major deficiencies but a few areas where accounting practices can be improved.

Tim Gill, a certified public accountant representing the South Portland firm Runyon Kersteen Ouellette, independent auditors of the town’s financial records, reviewed the 58-page report at the Board of Selectmen’s meeting Thursday night.

According to Gill, the town’s cash flow is holding steady, the collection of taxes has increased by more than $126,000 largely due to the increase in excise taxes, the capital and grant expenditures came in under budget and the town’s unassigned fund balance has increased for the past three years — all good financial signs, he said.

According to the report, the town’s assets exceeded its liabilities at the close of the most recent fiscal year by $18,086,593, a $344,533 increase from last year.

As of June 30, the close of fiscal year 2014, the ending fund balance of all governmental funds was $2,860,141. Governmental funds include the general fund, the capital project fund and other nonmajor governmental funds.

Gill said as of June 30, the general fund balance was $2,174,555, representing an increase of $74,880.

Gill said $7.128 million in fiscal 2014 revenues is attributed to taxes. That amount is 90 percent of the overall revenues the town sees.

In fiscal 2014, Gill said a total of 46 percent, or $3.626 million, of expenditures are assessments for the SAD 17 school district and Oxford County. The next largest expenditure was for general government at $892,796 or 11 percent. General government includes health insurance costs for all town employees.

Gill said that, overall, the town is in compliance with accepted practices of accounting that are reported under government auditing standards.

But Gill said that during the audit he became aware of certain opportunities for strengthening internal controls and operating efficiency, including the issuing of purchase orders, adding financial transaction controls and reviewing journal entries.

Gill said he noticed some instances where purchase orders were created after receipt of the related invoice. The auditor suggested that move indicates the purchase was not pre-approved and creates unnecessary work for administration.

Town Manager David Holt said department heads have been meeting monthly and are addressing the issue.

“We’re going to try to fix that,” he said.

Gill said proper internal controls would require that no one person handle a financial transaction from beginning to end, but because Norway is a small town with limited personnel, like other small towns, certain employees sometimes do more than proper accounting methods would recommend.

“It’s easier to hide fraud if one person does it,” Gill said.

Holt said the town is aware of the problem and tries to limit it.

Gill also noted that journal entries need to be reviewed when the town manager is unavailable. Holt suggested that the selectmen chairman be assigned that duty when necessary.

Both Holt and administrative assistant Carol Millett were praised for their work on the financial records. Gill said when he came into town in July, the records were “prepared and ready” for his review.

ldixon@sunjournal.com

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