Audit finds finances in order

Web posted October 6, 2000

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By Heidi Coryell
Staff Writer

An audit of Augusta-Richmond County government's financial statements showed that although the city's finances are in order, the city's finance department is troubled and steadily deteriorating.

The Finance Committee of Augusta Commission received a draft report Thursday of the city's annual financial statements.

The report showed that the government's general fund is in good health, with the city operating with a revenue surplus of about $535,000, much better compared to years past when the city's expenses outpaced its revenue by as much as $2.3 million.

Lon Morrey: Finance department director attributes errors to understaffing. FILE/STAFF

Although auditors who reviewed the city's books said there was no indication of ``illegal activity,'' a continuing trend of unbalanced accounts and unrecorded transactions could prevent future audits from being able to confirm that government money has been properly managed.

``We didn't notice any missing money, but it's just sloppy,'' said Kip Plowman, partner with Cherry, Bekaert & Holland Certified Public Accountants and Consultants, the firm that handled the city's audit. ``Yes, the money is there, but you wouldn't know it until after these accounts are done. The financial condition (of the city) is much better, but the recording of these transactions has gotten worse.''

The 126-page financial report was accompanied by a seven-page management letter, which detailed several deficiencies in the operation of the city's finance department, many that were repeat items from the 1998 audit, including:

Unrecorded transactions, such as $2.1 million of unrecorded inventory at Augusta Regional Airport at Bush Field;

A failure to check balance entries, which resulted in $80,000 of unbalanced funds from the general fund;

Inaccurate balances in pooled cash accounts, resulting in incorrect balances and interest expenses.

Several new errors were identified, including:

$7 million of unrecorded revenues at the airport;

$82,000 of expenditures for property and equipment incorrectly capitalized in the governmental funds

a Housing and Neighborhood Development fund balance that was off by $239,000.

Auditors recommended establishing formal, written procedures and regular, monthly reviews of government accounts to make sure the city's financial records are consistently accurate.

Finance department Director Lon Morrey attributed unbalanced books and incomplete transactions to an understaffed department that had to switch to a new, state-mandated accounting system. He also questioned the integrity of the audit and the manner in which it was released.

``While some of these things do have validity, I think some of these things have been painted in a way to make the finance Department look as bad as possible,'' Mr. Morrey said. ``I'm a little taken aback at the way this whole thing has been handled.''

The finance department will formally respond to the management letter at a special meeting scheduled for 1 p.m. Oct. 17.

Some Augusta commissioners questioned who was to blame for the oversights.

``This is serious,'' Commissioner Marion Williams said. ``We need to move forward and do what's necessary to make any changes we need to make. We knew there were problems in the finance department, and we turned out heads.''

Others said they were more intent on fixing the problems than pointing fingers.

``We can play the blame game - I'm not trying to cover up anything,'' Commissioner Steve Shepard said. ``Together we can run this government or we can tear it apart.''

Reach Heidi Coryell at (706) 823-3215.

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