The City of Statham’s fiscal year 2019 audit has been completed — and work on the FY20 one is underway — as the city continues efforts to catch up on its financial statements so it can regain eligibility for crucial state grant monies for capital-improvement projects.
The results of the FY19 audit were turned over to the city recently, and city officials said proper accounting procedures and internal controls oversight measures have been or are being implemented in an effort to bring the city into compliance and prevent numerous issues identified by the auditor from reoccurring.
The auditing firm currently being used by the city, BatesCarter of Gainesville, said in its final report that it had to make $193,381 in revenue-account adjustments and $61,811 in expense-account adjustments to accurately reflect those for FY19, which ended June 30, 2019.
The auditors identified eight other conditions in their report — several of them reissued from prior audits — and generally pointed to a lack of proper internal controls and procedures as well as inadequate record-keeping, which led to inaccurate accounting of monies and financial reports.
Among the problems identified, according to the report:
•Month-close procedures were not completed or reviewed in a timely manner, creating a greater risk of cash misappropriation.
•Some monthly utility billings were not recorded accurately.
•Some purchases had neither check copies nor supporting invoices.
•Employee files were outdated and did not reflect the correct pay rate for those employees.
•Cash bonds received by the city’s municipal court were not recorded as a liability for funds held in trust for others. The auditor recommended placing bonds received in a separate bank account, and the city agreed to make that change.
•The finance department accrued group health insurance employee withholdings, but did not make timely remittances to the Georgia Municipal Association, an issue that city officials said has since been corrected.
“We understand that, during previous administrations, certain areas of the city’s finances were left inadequate,” Mayor Joe Piper wrote in response to the auditors in the city’s “corrective action plan” attached to the final audit report.
Piper, who took office in January 2020, has touted the progress the city has made in getting its finances under order with the help of city accountant April Plank Stephens, who was hired by Piper at the start of his administration.
“With a new and knowledgeable administration, we anticipate, moving forward, that the city’s audits will be less stressful for everyone involved and the city’s finances will be better handled and accounted for,” Piper wrote. “We strive to be in compliance, and to provide our citizens with true and accurate financial statements.”
Stephens said the final FY19 audit will be presented to the city council for formal acceptance later this month, and the city is aiming for the end of this calendar year for completion of the FY20 audit, which is also being handled by BatesCarter. Stephens said the city’s goal is to finish the FY21 audit before the end of FY22 next June, which would bring the city completely up to date.
BatesCarter has now completed the city’s fiscal 2017, 2018 and 2019 audits over the last 22 months since being hired by the city council in August 2019. The city made the switch in auditing firms after several council members and former Mayor Robert Bridges grew increasingly frustrated and dissatisfied with numerous delays and what they viewed as a lack of responsiveness from previous firm Hawkins & McNair, which was nearly three years late completing the fiscal 2015 and 2016 audits.
The lack of up-to-date auditing has plagued Statham financially for the past few years as the city has been on the state’s non-compliance list since early 2016, rendering it ineligible for state grant money to help fund road improvements and other infrastructure projects.
The full final FY19 audit and other financial reports and documents can be found on the city’s website at www.cityofstatham.com/Finance.aspx.