Dear Mr Mayor,

In response to your criticism concerning my questioning of your Utility Director, Mr. Allen Mounts, in the month of November of 2014, Councilman O’Daniel and myself attended an exit conference. The attendees were Jennie Collins, CFO, the field examiner and his supervisor, Russ Lloyd and Allen Mounts. The field examiner passed out the proposed Utility Financial Statements for discussion. During my review of those Financial Statements I immediately noticed that the Utility Department had omitted the amounts owed by the City, i.e. when the SBOA required that the City and Utility checking accounts be separated in June of 2012, the Administration failed to pay the Utility approximately $2,000,000. In other words, shorted the Utility in the transfer of the Utility’s money into the newly created checking account of the utility. So, the City kept this money until December of 2014; however, the receivable was left off of the utility financial statements that were passed out that day.
The field examiner immediately confessed that he missed it!! I said that this was the responsibility of the Utility to prepare the Financial Statements to assure their accuracy and completeness. Then Russ Lloyd said “it does not matter because the City is on the cash basis…but I informed him that the City was going to present the December 31, 2014 financial on the accrual basis so the amount owed by the City would have to be recognized.
After that discussion, we moved to the cash short situation. The field examiner indicated that your books recorded receipts however those receipts did not agree to the bank records and the term used was CASH SHORT…now, in my world this is a simple concept, the cash register says we had sales of $1,000 and only $800 is recorded as deposited on the bank statement and you have only $100 on hand, well you are $100 SHORT…maybe supplies were paid out of the cash draw and that is why we have the shortage situation or maybe the clerk took the money…
Before Councilman O’Daniel and I let the meeting, we were required to sign a confidentially agreement that the meeting subject matter would be held in strict confidence until the report was released. Unfortunately, due to my very busy tax season, I have been preoccupied and suddenly realized that the report should have been released to the public. After visiting the State Board of Accounts website, I obtained a copy of the report and noticed that the CASH SHORT finding remained in the document.
So, in my audit world when our firm discovers client cash shortages exist, our clients generally start an investigation into the cause and circumstances and institute procedures to remedy future occurrences. Why would your Utility be an different? Most people would think that if told that a CASH SHORT situation existed, an investigation into the causes and final outcome would be in order? Of course the auditors are NOT investigators, they are examiners. Our firm, after auditing an organization, has been interviewed by investigators…my question was very simple, “What is the status of the investigation” meaning I was doing my job as an elected official to oversight, remember those nasty checks and balances and assumed you would be doing your job safeguarding the treasury. I fully expected to hear the findings, causes, and procedures implemented to prevent future occurrences. I’m puzzled why you are focusing so much on my question and more amazed that $400,000 is unaccounted for and you did not institute your own internal investigation!! Apparently,not because Mr. Mount’s only response was “that was over a year ago” but oddly enough the report findings posting to the public is only 60 days ago…and he said “I has been taken care of” How has it been resolved? What procedures implemented? Any irregularities? I guess we will just have to accept the fact that $400,000 is immaterial in your world. I must emphasize that I said investigation, not CRIMINAL INVESTIGATION!!
PLEASE TAKE TIME TO READ OUR READERS POLL QUESTION AND CAST YOUR VOTE ACCORDINGLY.Â