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Century Audit Finds Millions To Be Repaid To Special Fund, Deteriorating Financial Conditions
November 20, 2017
A recent audit has uncovered numerous financial problems in Century during the fiscal year ending September 30, 2016. Those findings included deteriorating financial conditions that could result in a future “financial emergency”, $3.83 million in transferred special revenue funds that must be repaid, $1.4 million in expenditures in violation of state statutes, over $5,000 in a bank account that did not appear on the books and other deficiencies.
According to the audit obtained by NorthEscambia.com:
- The town’s overall financial condition demonstrates signs of deterioration which, if not corrected, could result in a future financial emergency. The town’s general fund borrowed $285,248 from its special revenue fund to cover general operations of the town during the year under audit. As of September 30, 2016, the general fund owes the special revenue fund approximately $3.83 million. The revenues in the special revenue fund are restricted for specific purposes, and therefore, these funds will have to be repaid or it will be considered an inappropriate use of the restricted revenues.
- The town reported 2016 fiscal year expenditures in excess of budgeted amounts of $1,424,694 for the general fund, which is in violation of Section 166.241(3), Florida Statutes. Budget-to-actual comparison schedules were not provided to town council on a regular basis during the fiscal year under audit.
- A bank account for utility payment receipts was not recorded or reconciled in the town’s accounting software and was not recorded in the general ledger. However, the account held a year-end balance of $5,078.
- Capital outlay was not properly recorded and the capitalization threshold policy of $500 was not properly followed during the year under audit. Audit adjustments were necessary to correct capital asset account balances in all funds. In addition, capital assets purchases are not consistently identified and therefore these items are not properly tagged and inventoried. This inconsistent recording and tracking of capital assets causes asset balances to be misstated and allows for possible misappropriation of assets.
- Several general ledger accounts were not reconciled to detail supporting ledgers in a timely manner, and audit adjustments from the 2015 fiscal year audit were not posted until June 2017. Town management adjusted several general ledger accounts, resulting in $163,386 recorded in miscellaneous expenditures in the general fund.
- Bank reconciliations were prepared each month, however these reconciliations did not properly reconcile to the general ledger, and lacked adequate and timely review. The review of the September 30, 2016 bank reconciliations, and posting of necessary adjustments for proper reconciliation to the general ledger records was not completed until August 2017.
- The town does not have a formal written travel policy. The mayor is receiving a travel stipend of $590 per month. The auditors recommend town management establish a formal travel policy that is compliant with Florida Statute 112.061.
- The town did not follow Florida statutes regarding the required submission of financial reports for the fiscal year ending September 30, 2016.
According to the 58-page audit, the town is in agreement with the findings and will put a corrective action in place to address the issues.
NorthEscambia.com file photo.
Comments
30 Responses to “Century Audit Finds Millions To Be Repaid To Special Fund, Deteriorating Financial Conditions”
sigh…waiting for “the rest of the story to hit”
So what happens with running water
sewer
garbage pick up and street lights.
festivus
For the rest of us..
What is meant by HB & K “gave up” the audit? Did the auditor general order a different auditor because corrective actions were not done in 2015? (like internal controls..or what?)
I give..
Why did another auditor do the audit????Is it standard operating procedure or what?
I can’t figure it out.
did the Tornado directly cause the loss of special revenue fund to be used and put in the general fund? Is that SOP?
I meant *keep digging said it’s an interesting story..I didn’t finds story but link to info that lays out FL laws about responsibilities of municipalities and accounting principles in place..no real dirt…so is there more to the story?
Most likely has something to do with the corrective opinions issued by HB and K were not corrected… the lack of internal controls or segregated duties, not sure why..@ Dig Deeper says it is an interesting story http://www.leg.state.fl.us/cgi-bin/View_Page.pl?File=AuditsNot.cfm&Directory=committees/joint/Jcla/&Tab=committees
Maybe the audit was not done in a timely matter?
Hopefully corrections are being made.
Noticed Gulf Breeze is being audited by the state.. No doubt, it behooves management to pay attention to the audits
That’s all I know…
@Digging Deeper – that audit was prepared by the CPA firm (HBK) that RTH had in his back pocket, need to find out why HBK gave up the audit and a big firm (Warren Averett) in P’Cola had to pick up the audit.
The deeper you dig the more interesting the story will get…
@Accountability,
I think you are right, if Century continues to use the services of Hudson, it looks like you may still be trying to cover something up.
New Mayor and present town council, you should do like wise or you perpetuate the same thing. If no wrong doing has occurred then fine but if there has been then it was inappropriate, If grant money was earmarked for say, economic development or brownfield clean up or some thing was put into general fund and even if used for salaries or the utility, protocols were not followed.
If the town was going into financial emergency it should have been reported to the state, not covered up.
So what will it be?
If the Mayor and Council of the Town of Century, Florida truly want to serve their constituents and the good citizens of Century they should: (1) terminate the contractual relationship immediately with the CPA; and (2) file a complaint against the CPA for gross negligence with the Florida Attorney General’s office. The website for the local state attorney’s office is:
http://sao1.co.escambia.fl.us/contact.htm
The State Attorney General’s office should conduct an investigation and determine whether a crime has been committed against the citizens/residents/taxpayers of the Town of Century.
Last audit didn’t look too bad
https://flauditor.gov/pages/mun_efile%20rpts/2015%20century.pdf
Who did 2016 audit?
Robert Hudson
Do your job
Let’s not jump to conclusions. Maybe it was an honest mistake and oversight. The town’s budget is on a larger scale than most of us would be use to. But wait y’all – this was ongoing for some time right, AND, the current mayor just recently got in office. Wait – the former mayor is still around to monitor the office and also and has the town’s CPA in his back pocket. Looks like these footsteps could lead somewhere close to this and there may be more issues going years back. We will have to stay posted to the updates on this.
How about this? Ann Brooks is a CPA and a member of the Council for the Town of Century. Therefore, she should be knowledgeable about the services that the CPA was to provide to the Town of Century.
From a previous article on NE in 2017, This is the town’s accountant:
Robert T. Hudson, CPA
308 N Main St
Atmore, AL 36502
United States
251-368-5730
So does this mean, they are paying off the accountant to conspire with Fraud or something does the SA automatically look into this?
Funny. Same accountant Flomaton uses. Now I know
How $600,000 was transferred to an account in Flomaton
Without council knowledge of the account. Do we as citizens
Of the town just don’t care? This is our money as we
Pay taxes and staggering water and sewer bills. We pay
Sewer fee for every drop of water that comes out
The faucet. Yet we don’t stand up to do anything.
Just a question here, I really thought that the CPA was to keep up with all the money coming in and going out to keep something like this from happening. Does the town pay for a CPA if so they must not be doing their job.
Please publish the audit and also the name of the CPA in At more. The town council should be looking into this, as well at the towns people.
Looks like a case of ” Robbing Peter to Pay Paul ” hmmmm
You folks are NOT listening…the Town of Century employs a CPA to review the accounting to include reconciliation of balance sheet accounts, grant revenue and expenditures, fund balances and transfers, budget preparation, etc…AND they pay this CPA a lot of money to do all of this.
This CPA was supposed to reduce the time needed to conduct the audit by an outside independent audit firm and the audit fee savings were supposed to pay the CPA fees for consulting and accounting services.
Chellepea – an audit is conducted every year as required by the State of Florida, but the audits are due no later than 9 months after the town’s fiscal year-end (which is September 30th). It doesn’t look like the CPA has decreased the amount of time needed to conduct the audit AND I bet you the audit fees have went UP instead of going down. To be honest, it doesn’t look like the CPA has done much of anything!
Kinda thought that was the Town Clerks job Chelleepea.
an audit needs to be done on a regular basis and there needs to be an accountant on staff instead of just relying on software. if a full time accountant is not affordable perhaps someone temporary who can put some procedures in place for the office clerks.
And that is why we have audits.
If there come a time to unincorporate, it can be put to a vote and the citizens decide if they think they would do better with out the additional layer of government.
I doubt they will vote to disband anytime soon.
We know some funds were moved because of waste treatment issues, some of this was due because we were waiting for the RESTORE money for the Clean Water Act and the County passed it by for more “downtown glamorous” issues than protecting the source point, so the money had to be moved over.
The tornado stuck and money that was not budgeted had to be used that was not planned for.
Some software was purchased for a accounting, maybe it didn’t work right and was tied to the “automatic meters” to be read. Not sure
There was an audit in 2011 and no problems were found, it is online.
True the town may go bankrupt but it won’t be with out a fight and a last hurrah.
I noticed the inter local agreement for the NPDES permit, so that is a good sign. There was talk of consolidation but we can still remain status quo. Don’t be afraid to reach out to the county, we are a part and pay property taxes there. It is acceptable and fine.
If this area becomes an unincorporated area of D5 it will not be the end of the world but if it remain incorporated, it is easier to apply for grants.
If ECUA or another come in it may cost more than our current utility.
Keep clean water flowing in, poop flowing out, streets and such in order.
You can’t help it if a business locates here or not..
Actually, I believe you can blame the current administration for not looking at the books with greater detail, when they stepped up to the plate.
From now on, every time I am late on a payment to the city I will just tell them “I am in agreement with your audit finding; I will put a corrective action in place to address my gas bill.” Think they will give me two years to correct it?
Can’t blame the current mayor for this! But I am pretty sure some will try!!!
One to two years to post things????????? How much travel does the mayor do, sounds like a lot????? where are they going to get the money to repay, raise taxes OR let the City leaders start paying it back since they spent it wrong!!!!!!!!!!!!
Curious as to who conducted the audit?
Curious as to when the citizens of Century will decide ‘enough’?
Curious as to when the charter will be revoked and this town will be disbanded?
Northesambia.com or someone needs to dig deeper on this one, the Town of Century pays a LOT of money to a CPA in Atmore, AL for “consulting and accounting fees”. What does the town pay him for if he allows the books to get in this kind of shape?! Again, look at the amounts paid to the CPA in Atmore and ask yourself, WHY?! What services are provided for that amount of money??
But let’s build a splash pad. And pay OT so employees can attend meetings.
Looks like the town isn’t taking care of the towns business.
Debit on the LEFT and Credit on the RIGHT…..