Call it a Christmas miracle: The city of Columbus’ delay-riddled audit report for Fiscal Year 2020 is almost ready to see the light of day.
Mayor Keith Gaskin told The Dispatch on Thursday afternoon he was expecting the audit report “any day” now, possibly to be approved as soon as the Jan. 3 council meeting. At this point, it’s been a long time coming.
The city’s fiscal year 2020 ended Sept. 30 of that year. State law required the audit finished no more than 12 months later. Federal law mandated it be complete by Dec. 30, 2021.
Each year, entities in Mississippi that receive public money are subject to an audit. An outside auditing firm — in this case, Watkins, Ward and Stafford — presents its findings to the entity, which then submits the report to all the necessary agencies, including the State Auditor’s Office.
The process, documenting the budget year immediately following the discovery of former Chief Financial Officer Milton Rawle’s embezzlement of nearly $300,000, became mired in what current CFO James Brigham called “an accounting meltdown.”
“Most of it was (the auditors) didn’t have anybody up here who could answer their particular questions,” he said. “On top of that the reconciliations weren’t completed, the accounting records hadn’t been kept up to date, adjusting entries hadn’t been made.”
Documentation required for federal money the city received proved to be an especially thorny problem, Brigham said. On the one hand, documentation for Federal Emergency Management Agency reimbursements pertaining to the February 2019 tornado recovery had not been uploaded correctly.
“There was information that had to be uploaded to the FEMA portal to support some of our claims, and we had to work through all that,” he said.
He estimated that that documentation was uploaded by “June or July” of this year, but that still left a whole separate audit that had to be conducted.
If a municipality receives more than $750,000 in a single year in federal money, a “single audit” has to be performed, Brigham said.
“Between the storm claims and the (Coronavirus Aid, Relief and Economic Security Act) money, we got far more than $750,000,” he said.
“The federal government wants us to show that procurement controls and accounting were all done properly, and (Watkins, Ward and Stafford) didn’t start on that until August.”
That piece of the audit is now finished, Brigham said, and it’s just a matter of it all being added to the final report.
“I have already written the management and analysis portion, and I’m just waiting on some numbers to get plugged into it,” he said. “We’re just sitting on idle until (the auditors) finish their draft report.”
Better internal controls
Gaskin said he expects the FY 2020 audit report to be scathing.
“I have been told this one will be worse than the 2019 audit, and that is the one with the embezzlement,” he said. “The procedures it was suggested the city put in place in that prior audit were not put in place. The city has not had proper protocols in the past to make sure we were being the best stewards of the taxpayers’ money.”
Rawle, who resigned in 2018, pleaded guilty in February 2021 for an embezzlement scheme that spanned two years. He was sentenced to 20 years in prison.
His replacement, Deliah Vaughn, was hired in May 2019 and remained CFO until she resigned in October 2021 for a job in West Point.
Brigham wouldn’t speculate on what specifically the 2020 audit report would say, but he expects to see a need for enhanced internal controls.
“Those will be part of the findings, I’m sure,” he said. “Sign-offs on money transfers, enhanced controls over banking. The lack of those was how (Rawle) was accommodating his stealing. They will probably recommend better documentation as far as policies and procedures so people know how to do their job.”
Brigham said he is putting together a manual governing accounting procedures, and making sure the next CFO won’t have to start from scratch the way he did.
“The accounting and finance function should not depend on one person,” he said. “It should be documented so if somebody’s not here tomorrow, somebody else can pick up those pieces and get a pretty good head start. That’s just not been accomplished here.”
A ‘deeper bench’
Both Brigham and Gaskin said work on the 2021 audit — due at the end of this month — is already underway and that it will be a much quicker and more orderly process than the 2020 audit. It still won’t meet the federal deadline, however.
“The challenge in the past was that (Watkins, Ward and Stafford) had to do the accounting and then audit it,” Brigham said. “Now we’re doing the accounting, and their real focus is going to be checking and auditing it. Their workload will probably be cut in half.”
Brigham said Watkins, Ward and Stafford has already sent the city a letter laying out the information it needs for the 2021 audit, and that most has been done already.
“We’ve probably got 80 percent of their list already completed,” he said.
Gaskin said the first step in making sure the city doesn’t find itself in this position again is getting qualified people in the finance department.
“We’re trying to have a deeper bench of employees that are part of the process,” he said. “The council and I have worked together to increase salaries to attract people with the experience we need to make sure that everything is being handled properly. Municipal finance is complex, and you have to have folks with experience and dedication for that type of work.”
Brigham agreed.
“I think the best way to avoid this situation is to keep competent people in these positions,” he said. “I think people underestimate what it takes. When people looked at my credentials they thought I was overqualified for the job, but I haven’t found that to be the case.”
Ward 5 Councilman Stephen Jones told The Dispatch he thought Brigham had a good handle on the situation.
“I’m pretty confident in (Brigham) that he is doing the right things to make sure this doesn’t happen again,” he said. “He got a late start on (2021) because personnel weren’t in place last year, and I think most of it should be pretty easy once they get the previous year done. I don’t see that problem this time.”
Ward 6 Councilwoman Jacqueline DiCicco agreed.
“I think the 2021 audit will go much smoother,” she said. “(Brigham) is working hard to get the pieces in place already. I feel pretty good about it, and I feel positive that he is getting things in order.”
Wanda Holley, accountant at Watkins, Ward and Stafford who performs the city’s audit, declined to comment for this story, citing client confidentiality.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 30 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
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