By REID TUCKER
It quickly became apparent as the DeFuniak Springs City Council went over its recently returned audit for Fiscal Year 2013 that the report was a bit of a mixed bag.
The report’s positive aspects, while undeniably significant, were interspersed with more than a few areas in need of improvement, and the Council took the recommendations of its auditors, Tipton, Marler, Garner & Chastain, in stride at the Jan. 26 meeting.
Undoubtedly the highest high point of the audit was that the city posted a net profit of $239,396 in FY2013, quite the feat given that FY2012 saw a net decrease in assets of $840,411. Revenues from governmental activities exceeded expenses to the tune of $2,143, 881, and that was after the business type activities transferred $1,388,412 to the city’s general fund. The end result is that, excluding transfers, governmental activities had a net gain of $755,469, while business type activities shaved off more than $100,000 from FY2012’s losses to post a loss of $516,073.
As good as that news was, the bad news auditor Curtis Chastain had for the Council put a damper on the proceedings. The audit report, which came two weeks after the Council’s majority vote to fire former finance director Thomas Carman, mainly for the board’s dissatisfaction with his preparation of the audit, contained several instances of deficiencies in the audit.
A lack of adequate standard annual closing procedures included a failure to record prior year audit journal entries and an unbalanced general fund ledger at the end of the fiscal year, leading to “an excessive amount of year-end adjustments.” Cash reconciliations were also not carried out in a timely manner, and the city’s liabilities were not accurately reflected, particularly with regard to a promissory note to be paid to the Florida Department of Transportation. Reserve funds for the city’s water and sewer funds were not maintained at the minimum level called for by city ordinance, and, finally, the reconciliation of the city’s fixed assets per its general ledger and subsidiary ledgers was not completed in a timely manner.
The auditor’s report contained recommendations that the city implement standard accounting procedures to fix these issues. However, the view shared by Chastain and the councilmen alike was that the problems encountered in the FY2013 budget were not endemic.
“Basically, in the past [the city] had these procedures in place where all these accounts get adjusted before we come in as auditors,” Chastain said. “This year they were just not done. These things had to be done for us to get the books balanced and reconciled.”
This discussion led some of the councilmen to question whether or not the city had a written list of such procedures – specifically internal controls – or not, and City Manager Sara Bowers said general procedures were not listed, with the city having only written procedures for specific accounting contingencies. The matter of compiling an official list of general accounting procedures for the financial department will likely be revisited in an upcoming meeting of the City Council.
By way of wrapping up talks related to the audit, Bowers informed Chastain and the board members that the FY2014 audit will probably be ready for submission by March, with Chastain saying the report could be finished by the end of September, just in time for the end of FY2015.
The FY2013 audit report is available for viewing on the city’s website, http://defuniaksprings.net, and can be found in its 99-page entirety by clicking the agenda and minutes tab, then selecting the appropriate meeting agenda from the “City Council Agendas” drop-down menu.
The rest of the meeting flew by in comparison to the first half. The Council returned unanimous votes to accept a $6,000 donation to be used for maintenance and preservation of the Chautauqua Hall of Brotherhood, to set inmate work days at 10 hours (the same as Walton County’s policy), and to grant Triangle Chevrolet Buick 10 years of ad valorem property tax exemption on its new dealership.
Additionally, only six applications have been received to fill the city’s vacant planning director position, and Bowers said only three of those meet the qualifications for the job. As such, the position is open until filled, but she said staff could begin the interview process at any time.
Lastly, several upcoming events were previewed at the conclusion of the meeting. The date of the city’s flagship Lakefest event was set for May 30, with a June 20 rain date also put in place, and the second annual festival could feature a local round of the “Country Showdown” national talent search. Finally, late Assistant City Manager Bill Holloway will be honored on Feb. 5 at a ceremony dedicated to the completion of the new well and tank site on Peck Cawthon road, with the ceremony to take place at 10:30 a.m.
