18 deficiencies cited in city's 2015 auditBy BUSTER WOLFE,
Eighteen deficiencies were reported in the City of Hattiesburg’s fiscal year 2015 audit, which was presented to the City Council at its agenda setting meeting Monday afternoon at City Hall.
Elton Sims from accounting firm Carr, Riggs & Ingram discussed the audit and then said extra funds above the $103,500 contract price were needed. The first figure quoted by Sims was an extra $110,000.
Many of the critical deficiencies centered on the ability to produce the financial statements that determine the audit.
“These are the control problems that we found in conjunction with our audit,” Sims said. “With this many deficiencies, it really starts at the top in terms of control and a system of control that allows you to have a financial statement in a common manner. So this statement No. 1 really is an entity-level, control deficiency: The ability to create a financial statement.
“The second one really is similar in information, information systems, the ability of the software to generate the numbers needed to create the financial statements and the monitoring process that has to happen.”
Other deficiencies included timeliness of financial reports to meet deadlines, turning the general ledger into an audit, problems with the municipal court accounting system; customer account receivables, billing and customer meter deposits in the Sewer and Water Department, which underwent a separate audit; problems associated with capital assets, federal grants and expenditure management, timeliness in filings with federal projects, defining federal funds vs. non-federal funds and the lack of a payment process to schedule grant payments.
Sims said of the 18 deficiencies listed in the audit of 150-plus pages, four had rebuttal responses. He said the audit was unique.
“I’ve done financial audits for over 30 years and I have never done an audit like this,” he said.
Sims told Mayor Toby Barker that the accounting firm was awaiting to get “the receivables squared away” before releasing electronic copies of the audit that could be sent to companies that had been requesting them. A statement from Barker’s office Wednesday states Sims said an additional bill in overages was due to the complexity of the audit and other factors.
“The city attorney, council and administration are doing their due diligence in making sure that that the right questions are asked in order to minimize costs and spend taxpayer dollars responsibly,” the statement said.
An audit of sewer and water was completed for the general report, but a separate electronic copy – which the city was anticipating – was not included in the deliverables.
Carr, Riggs & Ingram were hired by the previous City Council and conducted a blind audit for FY 2014 before moving forward with FY 2015.
In other action during Tuesday’s meeting, the City Council:
• Approved Minutes of the Nov. 6, 7, 20, 21 and 29 meetings of the City Council.
• Adopted an Ordinance adopting procedures for access to public maintained by the City of Hattiesburg and repealing Ordinance No. 2349, adopted June 5, 1990, and any city ordinance in conflict therewith.
• Adopted a Resolution authorizing Requisition No. 12 from the Project Fund Construction Account in connection with a certain loan agreement, dated August 18, 2016, by and between the Mississippi Development Bank and the City of Hattiesburg.
• Authorized Mayor to execute lighting request with Mississippi Power Company to upgrade street lights on Dixie Pine Road from Edwards Street to James Street to 90 Watt LED lights for an increase of $58.19 to the monthly bill.
• Authorized Mayor to execute agreement between the City of Hattiesburg and TV Eyes Inc. for media monitoring services for the City of Hattiesburg at a cost not to exceed $3,600.
• Acknowledged receipt of monthly budget report for the month ending Oct. 31.
• Approved the sale of grave spaces, per attached receipts and memos.
• Approved claims docket for the period ending Nov. 30.