The city’s tardy audit report for Fiscal Year 2022 showed many of the same problems in city accounting practices as previous years.

Wanda Holley, with the Watkins, Ward and Stafford accounting firm, presented the report Tuesday to the city council, noting four material weaknesses, three significant deficiencies in the city’s accounting practices, as well as a material non-compliance in its budgeting for the fiscal year that began Oct. 1, 2021.

Holley noted the city was without a chief financial officer for nearly the first half of that fiscal year, with Jim Brigham starting in March 2022.

“That’s why the findings said ‘lack of accounting personnel,’” Holley said. “There weren’t enough people there to actually do all the reconciliations that are necessary each month.”

For material weaknesses, the audit report noted city personnel did not reconcile bank accounts timely to the general ledger, did not follow city policy in approving or documenting transfers between city bank accounts and did not properly reconcile payments or segregate collection and payment posting duties in municipal court.

Another material weakness showed city personnel did not obtain proper documentation for credit card charges related to fuel, travel, information technology, lighting, website maintenance and five hotel stays. One bill was paid by bank draft and not included on the claims docket for approval, Holley said. The accounts payable clerk paid the credit card bills in question without the necessary receipts.

Significant deficiencies in FY 2022, which are less severe than material weaknesses, included not maintaining adequate records for fixed assets, including subsidiary ledgers and annual inventories; inadequately documenting and reconciling landfill gate receipts; and not timely reconciling interfund loans.

The report also dinged the city for not preparing an adequate budget for FY 2022 and not amending it as necessary.

Holley’s report also noted four state law violations from the fiscal year. Four elected officials were late filing required economic interest statements with the Mississippi Ethics Commission; the council approved the required municipal compliance questionnaire three months late and with incorrect answers; the city did approve bids for its depository in a timely manner; and the city’s deputy clerk was not bonded – Holley recommended that position be bonded for $50,000.

The bonding process has begun for the deputy clerk, according to the city’s response in the audit report.

Catching up

Brigham told The Dispatch after Tuesday’s council meeting that the city had corrected all of those issues, except for properly documenting fixed assets. That process, he said, is ongoing.

Compiling the audit report for FY 2023 is underway, Brigham said. Whether it will come back cleaner than the previous year, he said, is “a good question.”

Brigham’s office provides information to the independent auditor for the annual reports.

City audits are still two years behind, as well. For example, Starkville’s board of aldermen approved its audit report for FY 2024 on Tuesday.

Brigham plans on catching the city up soon.

“My goal is to get Fiscal Year 23 and 24 done by (Sept. 30, 2026),” he said. “Then we’ll only be one year behind.”

Other business:

In other business, the council:

■ appointed Velma Woodard to a five-year term on the Housing Authority Board;

■ adopted new flood maps; and

■ set the property tax rate for next fiscal year at 53 mills, the same rate as this year.

Zack Plair is the managing editor for The Dispatch.

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