Florala audit shows problems
Published 2:09 am Wednesday, October 15, 2008
The city of Florala’s most recent audit has uncovered several serious issues in the way the city handles its money — one of which cost the city nearly $8,000 in overdraft fees.
Monday, Ken Odom of Rabren, Odom, Pierce & Hayes, P.C., presented the city’s 2006-2007 fiscal year audit and pronounced the city in “sound financial shape.”
Odom gave the city an “unqualified report” on the audit; however, audit findings show areas of concern in dealing with the receiving, disbursing and recording of the city’s cash transactions.
A recurring theme throughout the year’s audit findings stated, “The city did not have adequate control” over its finances. It also stated the cause of the findings could be attributed to “lack of personnel during the fiscal year with sufficient knowledge” of how to do the city’s accounting.
The firm recommended implementing immediate procedures that would rectify each of the stated problems, which ranged from not balancing the city’s bank accounts in a timely fashion to paying for both the gas and employee mileage for city travel.
Mayor Danny Franklin said the findings do point out that the city has some things they need to “fix” before the next audit.
“Some mistakes were made,” Franklin said. “There are some adjustments that need to be made, not on the audit itself, but in the way that things are done.
“There are some issues about the audit that were not discussed in (Monday’s) open meeting,” he said. “It’s a personnel thing, but we’re going to take this letter and use it as a tool to work with, to help the (city) clerk (Lykeshia Anderson) in her decision making process.”
Findings uncovered during the audit included:
Bank statements were, in some instances, accumulated for several months before being reconciled to the appropriate general ledger accounts. It was noted here auditors found insufficient fund charges totaling $7,500 for the year to the city’s general fund cash account.
Checks are not being recorded in the check register on a timely basis.
A reconciliation of accounts receivable from the general ledger to the accounts receivable detailed ledger should be prepared to check that the recording of transactions are accurate and proper and that any adjustments to or write-offs of accounts receivable have been approved.
Accounts payable were understated due to lack of reconciliation.
A list of outstanding notes for the purpose of confirming that information with the bank was requested prior to beginning the audit. A complete and accurate list was not provided.
Grant revenues and expenditures were not recorded at all, recorded in the wrong fund or intermingled with other accounts in the ledger.
None of the interfund accounts were in agreement and had not been reconciled at all during the year.
In some instances, the city paid for both the gas and mileage to the employee for city travel.
Purchases and disposals of fixed assets were not recorded properly.
It was also noted that a bank note was paid in full during the year but not recorded in the general ledger; bond payments were not recorded.
Other findings include:
Neither salaries, vacation time nor sick leave were accrued at the end of the year.
Tobacco stamp inventories had not been adjusted and a physical count performed.
Annual insurance premiums were expensed in the month paid.