Century May Hire New Accountant After Missed Deadlines, Late Audit; Grants In Jeopardy

June 7, 2018

The Town of Century is threatening to hire a new accountant after missed deadlines, the likelihood of a late audit submission to the state and the possibility that future grants could be denied as a result. And the issue $4 million in unpaid and possibly improper loans from a restricted revenue account remains.

Debbie Nickles, the town’s planner, said a $30,000 USDA Rural Development grant is in danger due to a 2016 audit.  The USDA requested more information from the town after reviewing Century’s 2016 audit which showed “material weaknesses, significant deficiencies and and compliance findings”, according to an email from the USDA.

“It’s a real problem for future grants,” Council President Ann Brooks said.

In response to a NorthEscambia.com public records  request, Brooks provided copies of email exchanges between Brooks, a representative of auditing firm Warren Averett and town accountant Robert Hudson.

Brooks said the this year’s town audit will not be completed in time for submission by the state’s June 30 deadline because accountant Hudson has not complete a list of tasks and provided documentation to  Warren Averett.

“I have been corresponding with Robert directly for most of May. Each week he has promised he would be able to turn over the information, and then there is an issue and it is not ready. I emailed him again today to check on status. If you recall, we had tried to start the audit in January but were unable to get information at that time and told Robert we would try again in May,” CPA Kristen McAllister of Warren Averett said in an email to Brooks. “The Town’s audit is due to the State on June 30 and with only 1 month remaining until the deadline, I am not confident in being able to meet that deadline.”

“I had every intention of getting the audit completed timely this year, but we have not been able to get information to start the audit. I spoke with Kim earlier this month and let her know as well that we were waiting on information,” McAllister’s email said.

After missing a deadline to provide documentation, Hudson wrote on May 9, “I do expect to be completed within the next few days…..hopefully by Tuesday of next week.  I am shooting for Friday of this week, but allowing additional time to put out a fire or two there as always happens”

The auditor followed up with an email on May 15 inquiring about the status of Hudson’s work.

He replied May 21 that several things were not completed by town employees. “Give me a couple more days,” Hudson wrote.

After a May 30 inquiry from the auditor, Hudson replied quickly that he was going back to the town offices “hopefully to complete the little things”. He also said the town’s Quickbooks software had to be updated, slowing the process.

In a June 4 email to Brooks, Hudson said everything should be in the auditor’s hands by the end of the week.

The Century Town Council voted to hold Hudson to a June 8 deadline to complete all work for the auditor. If not, the town plans to advertise for a new accountant. “…this letter serves as notice that we cannot have nor do we expect this type of service anymore. This is hurting our chances of getting grant money,” Century Mayor Henry Hawkins wrote in a demand letter to Hudson. [Click here to read the entire letter (pdf).]

“In the real world, I’d get fired,” council member Ben Boutwell said.

In his June 4 email to Brooks, Hudson offered explanations for the late submissions to the auditor. “There was difficulty in running down some of the entries needed to correct the books before we turned them over to the auditor,” he said, adding that the resignation of the town clerk and the appointment of a new clerk further slowed the process. He also stated that a search was underway for documentation to substantiate bills that had already been paid without invoices being posted. He also listed numerous tasks that are complete.

The 2016 audit found about $4 million had been borrowed from the town’s special revenue fund over several years to cover the general operations of the town. 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. Century currently has an annual budget of $4.5 million and has been unable to repay the special revenue fund.

Since the 2016 audit was received, the town has continued to borrow from the special revenue fund, including money to keep the gas department afloat.

“This is the same situation as we referenced as a finding in the 2016 audit. All other amounts being borrowed from the special revenue fund have been treated as a loan as well.  I would imagine this situation has continued through fiscal year 2017 as well, and would be included in the financial statement findings again this year,” the auditor wrote in a June 4 email to Brooks. Also, it would not be as significant of an issue if it was a small borrowing with repayment plan, however, it was approx. $4M (million) cumulative through fiscal year 2016. With that significant of a loan without a plan to reimburse the special revenue fund, it becomes a concern for the financial condition of the Town.”

Hudson wrote that he was working with the town attorney to resolve some of the “loans” from the special revenue fund by a reclassification as “maintenance of the street”, which is an allowed use.

Pictured top: Accountant Robert Hudson addresses the Century Town Council during a May 7 meeting. NorthEscambia.com file photo, click to enlarge.

Comments

13 Responses to “Century May Hire New Accountant After Missed Deadlines, Late Audit; Grants In Jeopardy”

  1. Digging Deeper on June 8th, 2018 10:15 pm

    Funny how Boutwell says in the real world he would be fired. Newsflash. This is the real world. Is someone afraid of blackmail or are they all incompetent?

  2. Digging Deeper on June 8th, 2018 9:39 pm

    So Dig Deeper what do you mean exactly?
    I
    Dug deeper and my assessment basically is that an article will be coming out soon. You give enough rope people hang them selves. A wise person recognizes a lost cause. Hopefully there will be no scapegoats. But we know how the Good ole Boy network works in eScambia County. The CRA is a lost cause as is the sawmill being cleaned up.

  3. Chelleepea on June 8th, 2018 11:52 am

    Not following proper accounting procedures and lacking enough revenue are separate issues. Both needs to be addressed quickly.

    The accountants complaint about the accounting software not being upgraded is ridiculous. There was a time where a ledger and pen sufficed. That is his responsibility. Also it is his responsibility that proper daily, weekly, monthly procedures are in place and followed by the clerks so that when auditors come around there won’t be a rush.

  4. Citizen on June 8th, 2018 1:53 am

    The late audit will probably alert the joint legislative auditing committee since it was uncorrected for another year The ongoing misappropriation of funds will not be able to be corrected the State will mostly likely come in and then perform operational audit. Most likely the good ole boys didn’t under go a grand jury investigation. I am wondering about keeping the sewer and water going. I suppose its a matter of time. Who is stepping up for the election. What happens if no one does?

  5. David Huie Green on June 7th, 2018 10:04 pm

    REGARDING:
    “@David Huie Green, this isn’t about whether or not the TOC makes enough money.”

    It partly is. Sure, the focus is on Robert’s performance, but the audit is bound to indicate they are failing. It should help them see the areas of failure but needing to shift funds around won’t change the fact.

    “They are paying the CPA real good money to prepare their books on a monthly basis and he can’t even get the books to the auditor in time for them to file a timely audit report. You don’t have a problem with that?”

    Nope. I don’t live in Century.

    If the reason he couldn’t do it in time is that the information needed was not supplied in a timely manner, then I would be silly to think it would all become perfect with a different accountant. Try it and see if it makes you happy.

    David for the class of ‘72
    (and Century too)

  6. Oversight on June 7th, 2018 7:48 pm

    As the screen name implies “Oversight”…. Which means the act of overseeing government action. Here the accountant that Century has hired is not performing according to contract. Time to move in a new direction.

  7. Citizen on June 7th, 2018 4:53 pm

    Knew this was coming..strike two

  8. Dig Deeper on June 7th, 2018 4:35 pm

    @David Huie Green, this isn’t about whether or not the TOC makes enough money. They are paying the CPA real good money to prepare their books on a monthly basis and he can’t even get the books to the auditor in time for them to file a timely audit report. You don’t have a problem with that?

    Dig for David Huie Green seeing the real issues and not the smoke screen.

  9. tg on June 7th, 2018 3:39 pm

    Will Century ever get out of the bad news era?

  10. David Huie Green on June 7th, 2018 2:31 pm

    Not making enough money to pay the bill may not be the accountant’s fault.

  11. Bob on June 7th, 2018 11:31 am

    What’s your hurry?

  12. Dig Deeper on June 7th, 2018 11:28 am

    I have been saying for some time now, there is MUCH more to this story. My question is this, with all of the KNOWN issues over the last couple of years, why is the Town of Century just now “threatening” to hire a new CPA?

    I can only assume that the facts surrounding all of this are too complicated for most to fully comprehend. The Town of Century employs a CPA and pays him a very significant amount each month to make sure that they Town’s books are “in order” and ready to be audited with NO issues. If the CPA is doing his job (remember he gets paid EVERY month), then the books of the Town should have been ready to give to the audit firm before December 31st. The Town of Century (like most municipalities) has a year end of September 30th. The fact that the books still are not ready by May 31st of the following year should make it clear that the CPA is not doing his job.

    At this point, you have to ask yourself, why is the Town of Century’s mayor and council so lenient with this CPA?? Something does not seem right!!

  13. M in Bratt on June 7th, 2018 7:08 am

    Looks like a case of; If you put up a thick enough smoke screen, nobody can see what is really going on.

Written by William Reynolds · Filed Under News