Audits costs represent small percent of municipal budgets

Published 12:00 am Thursday, September 14, 2017

A comparison of audit costs for the larger municipalities in the county shows costs have ranged from $5,300 to $50,000, depending upon the size of the budgets and the projects and grants in which municipalities are involved this year.

The Star-News collected the numbers after Councilwoman Sue Mathis of Florala questioned the expense of a new auditor hired by Mayor Terry Holley.

Mathis said in the past, Ben Vance has prepared Florala’s legally-required audit for nine years, and that his contract caps at $6,500. She questioned Holley’s hiring of the Enterprise firm of Carr, Riggs and Ingram, whose fees are expected to be between $22,000 and $25,000. Holley said the cost is for an audit of both the city’s books and the books of its utilities board.

In Andalusia, audit costs vary based upon a number of factors.

“Our audit expenses varies depending upon the hours the auditor spends on the project, but our audit usually costs $45,000 to $50,000,” Andalusia City Clerk John Thompson said. “Some routine years when we haven’t had much going on, no new projects, few grants, etc., it has been even lower, like $38,000.”

Thompson said more recently, like in 2016, when they did the downtown projects and all of the procedures were new, the capital cooperative improvement district for the restaurant and the theater, bond issue and leases, it took the auditors more time to review those items and the laws that govern arrangements such as those, and minutes approving the agreements, the bill was in the $50,000 range.

“I suspect the bill for 2017 will be in the lower ranger for obvious reasons,” he said. “We didn’t start anything big and out of the ordinary.”

The City of Andalusia operates on an annual budget of $18.3 million. The audit fees represent less than 1 percent of the city’s expenses.

In Opp, City Clerk Connie Smith said the council paid $35,000 in auditing expenses this year with an $8.4 million budget, also less than 1 percent of expenses.

Florala City Clerk Kathy Rathel shared the city’s accounting expenses for the year.

“Ben Vance was paid a total of $5,300 for our FY2016 financial audit,” she said. “The general fund budget for accounting and auditing was $6,050 of which the $5,300 for Vance CPA was includes along with $750 estimate for our United Systems Technology’s accounting system maintenance costs.”

The city’s general fund budget historically is between $1 million and $1.1 million.

The city also paid out $3,906.50 for the Bank of New York bond administrative audit fees.

Holley said that the 2016 audit met with generally approved auditing standards, but did not conform to governmental auditing standards. The new audit fees represent lest than 2 percent of the expected total budget costs.