A draft audit exhibits indicators of a monetary emergency in Century and multi-million greenback deficits.
The audit discovered the monetary emergency circumstances exists resulting from missed debt service funds, not transferring payroll taxes in a well timed method and issuing payroll checks with out ample funds within the payroll account.
“The City has skilled vital monetary difficulties over the previous couple of years and subsequent to year-end,” in response to the audit for the fiscal yr ending September 30, 2019.
The audit discovered of the city completed the yr with a $Three million basic fund deficit for governmental operations. Belongings exceed liabilities on the shut of the yr by $5.eight million. However of that quantity, $4.9 million was in capital property (property, roads, drainage techniques, and so on.) and $3.9 million was restricted by debt service funds and different makes use of.
The enterprise actions of the city — comparable to water, sewer and fuel — had a steadiness of $540,000 in unrestricted web funds. The pure fuel fund misplaced $263,000.
Throughout the board, the city had an unrestricted web place of a $2.Four million deficit.
The city didn’t make debt service funds due in March 2017, 2018 and 2019 on fuel system income bonds.
As of September 30, 2019, there was a deficit steadiness within the basic fund of $Three million and within the pure fuel fund of $1.7 million. Each of those funds have borrowed vital quantities from different funds of the city.
Audit findings included:
The city’s general monetary situation demonstrates indicators of a state of monetary emergency as described in Florida statutes. Total components contributing to this situation embody lack of brief and long-term monetary planning, improper money administration actions and lack of research of current tax charges and price buildings for proprietary operations.
The pure fuel fund borrowed $222,000 in the course of the fiscal yr from the final and water and sewer funds to cowl basic operations. In June 2018, the city council accredited a reimbursement plan of $300 monthly for $2.9 million borrowed inappropriately from the restricted particular income fund. The audit famous the city ought to consider prices incurred in prior years for doable reclassification, if such prices met the character allowed for infrastructure enhancements.
This situation has existed for the previous three audited durations.
The auditors really useful that the city develop lengthy and short-term monetary plans to enhance its monetary situation.
- The City skilled the next money administration points in the course of the fiscal yr:
- Payroll money account was overdrawn quite a few occasions in the course of the yr.
- Payroll taxes weren’t remitted well timed to IRS.
- Payroll checks have been supplied to and cashed by workers previous to the difficulty date on the test, inflicting the City’s payroll checking account to be overdrawn.
- Extreme late charges and curiosity expenses incurred on bank cards.
- Late and missed debt service funds by the water and sewer fund and pure fuel fund.
- Insufficient funds held for buyer deposits within the pure fuel fund.
This was a recurring discovering not corrected from the earlier fiscal yr’s audit.
The issues are brought on by the city council not receiving well timed details about the money place and money wants of the city which has prevented well timed transfers of money between financial institution accounts. Turnovers within the city clerk and division management over the previous few years was additionally cited, together with working deficits within the pure fuel fund.
The city council “ought to obtain well timed details about the money place and money wants of the city to make sure satisfactory funds out there for weekly paychecks, payroll taxes, and debt service funds,” the audit states. It was additionally famous that bank card funds needs to be made on time to keep away from late charges and curiosity expenses.
Credit score Card Utilization Coverage and Receipts
The audit famous that a number of receipts and supporting documentation for bank card expenses was not maintained. The enterprise goal of a number of bank card transactions was not documented, significantly on purchases of meals, gas and varied provides. The city doesn’t have a coverage requiring workers to supply receipts for transactions nor doc goal of purchases.
The earlier audit discovered the identical drawback.
Reconciliation of Accounts
Interfund basic ledger accounts weren’t reconciled. Audit changes have been required to regulate for the precise audited quantities and permit for correct balancing of the interfund accounts. The identical drawback has existed for 3 consecutive years.
Capital Asset Monitoring
There are capital assess that haven’t been appropriately recorded within the city’s information, and the city has not accomplished a list of property. The situation was additionally discovered within the 2018-2019 audit.
City of Century Response
The City of Century will submit a corrective motion plan to deal with the audit findings. The city council is predicted to debate, and maybe approve, their responses throughout conferences Monday night time. NorthEscambia.com will publish an extra story with the city’s responses.
The draft audit should even be accredited earlier than being submitted to the state.
Pictured: The Century City Council meets on February 3, 2020. NorthEscambia.com picture, click on to enlarge.