Audit draws questions
DEMOPOLIS &8212; While visiting the headquarters of Foster Farms
last October, the mayor presented the company with a gift, a picture of Bluff Hall. The $85 for the picture was charged on a City of Demopolis credit card.
This charge is just an example of many others listed under the section unallowable costs in the city&8217;s most recent audit report. Unallowable costs, along with six other items are listed as reportable conditions in the report.
According to the report, all of the seven conditions were considered material weaknesses associated with internal control of the city&8217;s finances. Each reportable condition was followed by a corrective action which, according to Mayor Cecil P. Williamson, was decided on by herself and Rob Pearson, the auditor.
Williamson said some of the things first found in the report were mere mistakes in filing, in part due to the turnover in office staff. The remainder of the items considered reportable were: cash reconciliations, medical insurance premiums, credit cards not substantiated, travel expense reimbursement, unallowable costs, unapproved travel allowance and meals and entertainment substantiation.
Credit cards not substantiated
The report contains a detailed listing a total of $7,040.01 in credit card charges that were not substantiated with inadequate documentation. According to Williamson, all of the unsubstantiated charges were made with City of Demopolis credit cards, which are held by all department heads. Those who had access to the cards, in addition to the mayor, were Public Works Director Mike Baker, Director of Public Safety Jeff Manuel, Court Clerk Karen Broadhead, Library Director Lindsy Gardner, Fire Chief Ron Few, Horticulturist Jason Seay, Parks and Recreation Director Mark Pettus and City Administrator Paula Bird.
Williamson said appropriate documentation consists of a descriptive invoice or receipt listing each item and its associated cost. She said while some of the charges had documentation, they did not have what is considered appropriate supporting documentation.
Effective Sept. 26, Williamson said no department head has a City of Demopolis credit card any longer. The policy is in effect for at least the next 30 days.
Williamson also said she no longer carries a city credit card. Further corrective action for the charges included a policy where as of Oct. 1, all undocumented receipts will be charged to the user.
Travel expense reimbursements
The city also reimbursed Williamson for travel-related expenses totaling $445.30 that were not properly documented. In order to correct the situation, the council voted to approve a new travel policy effective immediately.
Williamson claims the travel charges were made during a trip to Las Vegas where her daughter accompanied her, but paid her own ticket. When the pair decided to drive down to Phoenix to visit family, her daughter mistakenly used the city&8217;s credit card when renting a car for the trip.
Williamson also said if they had a travel policy in place the situation would be different. Under the new policy, a travel form must be completed and submitted for reimbursement within 15 days of the travel return date. Furthermore, any overnight travel requires pre-approval for city employees to receive an amount equal to the IRS allowable per diem rate for meals and incidentals for each day of the trip. Any funds not documented on the travel form or unspent must be repaid to the city.
Other expenditures made by the city during the 2005-2006 fiscal year were categorized as unallowable by Alabama law because they resulted in the benefit to individuals and not the municipality. The report shows a total of $1,091.69 charges labeled &8220;Williamson,&8221; including an airline flight for Wayne Williamson, which the mayor said was reimbursed.
Another item listed under unallowable costs includes $8 tickets for the mayor, Councilman Jack Cooley and Councilman Woody Collins to attend a Smithsonian Institute IMAX presentation. Cooley said at the time, he was unaware the charges were being made with a city credit card.
Cooley also expressed his concern over the way finances were being handled with the city. He said during his many years in the private business sector, he would have been fired if he &8220;did a fraction of the things wrong&8221; the city has been implicated for.
Councilman Thomas Moore charged an airline flight in the amount of $233.69, which he said was purchased in order to take advantage of a group rate.
When asked why he did not reimburse the city when the charge was made in March 2005, Moore said he had forgotten about making the purchase, that it &8220;slipped his mind.&8221;
Unapproved travel allowance
The reports states Williamson received a monthly travel allowance of 300 local miles that was not approved by the city council and furthermore that the monthly amount was not substantiated by contemporaneous travel records. In total, Williamson was reimbursed for a total of $1,650 from the period of eight months.
Williamson claims she was unaware she needed approval from the City Council for a monthly travel allowance, but that she did get approval from the Finance Committee.
Jack Cooley, a member of the Finance Committee, said he or anyone on the committee never approved any kind of travel allowance for the mayor.
Since September 2006, the mayor said she has not received the monthly travel allowance, and that now she fills out a form to reimburse her for actual miles driven.
Meals and entertainment substantiation
The city provided meals and other entertainment that was not properly substantiated, a total of $795.75. The report also states that as of Sept. 30, 2007 all items listed with the name Williamson have been reimbursed to the City of Demopolis.
The city was not reconciling cash amounts on a timely basis according to the report, but as of Jan. 1, 2007 this has been corrected by monthly reconciliations. Furthermore, the Mayor is to sign off on monthly reconciliations, which the Finance Committee will review at their monthly meetings.
Medical insurance premiums
Some city employees received medical insurance without an associated payroll deduction, and the city being billed for former employees past their termination dates.
Williamson said during her tenure as mayor, this is the first time the audit report came back with reportable conditions.
When asked if the audit report will correct some of the &8220;weak&8221; internal controls, Councilman Moore said, &8220;I think these new policies will address these concerns.&8221;
Councilman Cooley was less positive.
Cooley said the new controls, such as the travel policy, will correct problems in the future, but do not make amends for past mistakes.
Williamson said the new firm, who will begin working on the fiscal year 2006-2007 audit report on Monday, will have to have it complete by Jan. 31, 2008. The firm who completed the 2005-2006 audit report, Mason&Gardner CPAs, is now the city&8217;s accounting firm and cannot perform the audit.