Henderson’s auditor has asked for a private meeting with City Council member Elissa Yount to answer her audit-related questions, and he suggested that meeting be held more than two weeks into the next fiscal year.
Curtis Averette, the William L. Stark & Co. accountant who handled the city’s audit, sent an e-mail response Monday morning to City Manager Eric Williams regarding a list of questions Williams sent him 10 days earlier.
Williams sent those questions at the City Council’s request after not acting on Yount’s repeated requests over the previous two months to bring Averette before the council to face questions on the audit, which was delivered in late January, at least a month later than usual, and brought the news that the city’s general fund balance was less than half the Local Government Commission’s recommended minimum amount of 8 percent of expected expenses.
Yount first brought a list of questions for Averette, Williams and city Finance Director Traig Neal to a meeting of the City Council’s Finance and Intergovernmental Relations Committee in February. Averette was to present the audit at that meeting, but because of the extent of the questions and the deep concerns about the findings of the audit, all questions were deferred until a public forum Feb. 28.
But neither Averette nor anyone else from William Stark attended the forum. Averette’s reported reason for skipping the session was that no one had submitted written questions for him, even though Yount brought a written list to the earlier FAIR meeting.
At almost every meeting of the full council or the FAIR Committee since then, Yount asked about a meeting with the auditor, and Williams said one could be set up. Then nothing happened, even though the city’s standard practice is for the auditor to formally present the audit and answer questions in person.
At the FAIR Committee’s session with Embassy Square Foundation officials, Mayor Clem Seifert suggested that anyone on the council who had questions should submit them in writing to Williams, who would forward them to Averette along with a request for a meeting.
Yount was the only council member to submit questions, and her list was similar to what she had three months earlier.
At May 9’s council meeting, Yount again asked about a meeting with Averette, and Williams again said one could be set up if that was the council’s desire. Yount expressed the importance of meeting with the auditor not only before the council completes the budget for the fiscal year beginning July 1, but before Neal leaves the city government June 1.Seifert said that seemed like a reasonable request.
According to Averette’s e-mail message, it’s not.
He invited Yount to meet with him and a representative of the Local Government Commission any ay during the week of July 18 — long after the budget is set and Neal is gone to an Oxford accounting firm that is a possible competitor for the city’s audit contract in the future.
“I apologize for the delay in holding the meeting, but audit fieldwork and vacations have my calendar full and Mrs. Edmundson stated July would be the earliest a representative from her office could come,” Averette wrote. Sharon Edmundson is with the LGC.
Averette also wrote that he suggested and Edmundson agreed that a meeting with Yount would be “the best way to handle the situation at hand.”
Yount, never one to appreciate being “handled,” rejects the idea that the questions are matters to be addressed in private. She was the only one to submit questions, but the list sent to Averette was intended to be from the entire council. And Yount insists that the questions not only are of general interest, but are crucial as the council crafts a budget.
The questions Williams forwarded to Averette from Yount:
1. You say in the audit that your internal control would not necessarily disclose all matters in the internal control that might be material weaknesses and that your audit does not provide a legal determination on the City of Henderson’s compliance with the requirements of Government auditing standards. Who should be pointing out to the Council members material weaknesses and who oversees the city’s legal compliance with requirements?
2. Since there was such a material change in the fund balance, how did we get an unqualified audit?
3. When the conference call was made to the LGC on Oct. 13, who was present and privy to the call? What amount of deficit was discussed? What proposal was made to correct the problem?
4. Please explain where in this audit we can find the figures that show the deficit created in the General Capital Project Fund and where this deficit was eliminated. Can you point out where the transfer from fund balance to CIP is and when it took place?
5. Our budget ordinance called for borrowing $900,000. Did the LGC approve or disapprove this borrowing?
6. When were you aware that the city did not have a budget ordinance to cover $395,704?
7. We received a letter for the LGC in 2003 as well as 2004 about our budget problems. Whose responsibility is it to see that we abide by and carry out their instructions?
8. When was the letter of November 17 written? When did you assume the Council members received it? Who actually wrote the letter? Were any of the concerns in this letter discussed at any time with city management in the months prior to the letter being sent? If so please give complete details of all discussions.
9. Your audit report tells us that all disclosures necessary to enable the reader to gain the maximum understanding of the city’s financial affairs have been included. It appears to be a strange choice to put such a significant fact — the loss of all this revenue in the fund balance — on the next to last page and not even name the funds that required doing this. Please give your rationale for this.
10. As a corrective action to say only that the finance officer will be more careful in the future to ensure proper funding for all expenditures seems a little lame when we’re talking about $1.8 million. Please give your rationale for this.
11. How long should original invoices be kept for any capital project?
12. Have our preaudit obligations failed us?
13. Who authorized the interfund transfer that eliminated the deficit in the CIP for Embassy?
14. What does the Council need to do to see that interfund transfers are not made unless they have Council approval?
15. What does the Council need to do to see that we do not expend any moneys, regardless of their source, except in accordance with a budget ordinance or project ordinance?
16. According to The Local Government Budget and Fiscal Control Act, a project ordinance shall clearly identify the project and authorize its undertaking, identify the revenues that will finance the project, and make the appropriations necessary to complete the project. Who is responsible for seeing that this is done?
17. According to the same Act, no obligation may be incurred for a capital project or a grant project authorized by a project ordinance unless that project ordinance includes an appropriation authorizing the obligation and an unencumbered balance remains in the appropriation sufficient to pay the sums obligated by the transaction. Who is responsible for seeing that this is done?
18. In the Operating Budget Policy for the City of Henderson it states that any appropriation of fund balance or the use of retained earnings shall show the current fund balance or retained earnings and how such use would affect fund balances. When and how should this be shown?