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Century Audit Finds Millions In Deficits, Millions To Be Repaid, Deteriorating Financial Conditions
August 21, 2019
A draft audit shows financial conditions that are continuing to deteriorate in Century and multi-million dollar deficits.
Tuesday afternoon, Kristen McAllister of the auditing firm Warren Averett presented the draft audit for the fiscal year ended September 30, 2018, to the town council. The town will finalize responses to the findings before the audit, which was due back on June 30, is submitted to the state.
Those findings included deteriorating financial conditions, a deficit of $3 million in the general fund, a deficit of $1.5 million in the natural gas fund. The audit also found:
Financial Condition
The town’s overall financial condition demonstrates serious signs of a deteriorating financial condition. The Town has experienced several cash flow and management issues resulting in assessment of late fees, insufficient funds in the payroll bank account, delinquent payroll tax deposits, and missed debt service payments.
The natural gas fund owes the special revenue fund approximately $2.7 million. The sales tax revenues recorded in the special revenue fund are restricted for specific purposes; therefore, these funds will have to be repaid or it will be considered an inappropriate use of the restricted revenues. In June 2018, the town council approved a repayment plan of $300 per month.
“Overall factors contributing to this condition include lack of short and long-term financial planning, improper cash management activities, and lack of analysis of existing tax rates and fee structures for proprietary operations,” the audit states.
Cash Management
The Town’s cash management and control activities are weak, as evidenced by the following:
- Payroll cash account was overdrawn numerous times during the year
- Payroll taxes were not remitted timely to IRS
- Payroll checks were provided to and cashed by employees prior to the issue date on the check causing the town’s payroll bank account to be overdrawn
- Excessive late fees and interest charges incurred on credit cards
- Late and missed debt service payments by the water and sewer fund and the natural gas fund
- Town council not receiving timely information about the cash position and cash needs of the town
Credit Card Usage Policy and Receipts
The audit noted that several receipts and/or other supporting documentation for charges made to the town’s credit cards were not maintained. This practice could result in the payment of unsubstantiated expenses. Furthermore, it was also noted that the business purpose of certain credit card charges was not documented. Examples include purchases of food, fuel, and various supplies.
Capital Asset Tracking
Town assets are not properly recorded in the town’s records, creating the need for a complete physical inventory.
Budget Over Expenditures
General fund expenditures exceeded budgeted amounts by $653 thousand, which is in violation of Florida statutes. The town budgeted grant revenues and expenditures in the special revenue fund, but recorded this activity in the general fund causing the over expenditure. Without an accurate and complete budget, the council cannot effectively make the necessary financial decisions for the town.
Audit Late Again
The town’s audit is being submitted late for the fifth consecutive year. The audit was due to the state by June 30, 2019, but still has not been filed.
Unused Bank Accounts
The town maintains over 25 checking accounts. Many of the accounts were established for narrow purposes and have few transactions and small balances.
Pictured top: Century council members Sandra McMurray Jackson, Ben Boutwell and James Smith review audit findings Tuesday afternoon. Pictured below: Mayor Henry Hawkins listens as auditor Kristen McAllister presents her findings. NorthEscambia.com photos, click to enlarge.
Comments
41 Responses to “Century Audit Finds Millions In Deficits, Millions To Be Repaid, Deteriorating Financial Conditions”
After studying the situation a while, one auditor turns to the other in growing horror.
“We’re not going to be paid for this job, are we?”
“Probably not.”
The laws need to be changed so that the people who make improper decisions or misappropriate, squander, divert, waste, or do anything else with funds as elected or appointed officials can be held financially responsible. Hiding behind the aegis of government employee shouldn’t be allowed.
I’m sure if the proper investigators find the right people who are responsible, no matter from how far back, their assets should be forfeited and possibly cover the shortfall.
It’s funny how politicians have enacted laws that will allow them to confiscate any asset that is deemed to be the fruits of criminal activity yet an elected figure who enjoys these same fruits gets to retire and lead the good life.
This is just a general commentary and not meant to imply guilt by any of the people particular to this situation.
The $3.5 million in debt represents a total of arounf $1941.00 per person living in Century.
The US debt represents around $61,539 per person.
We are all in big trouble folks. It’s time to stop burying our heads in the sand and face the reality of what the Government is doing to our country.
dissolve the town, declare bankruptcy, and make it under Escambia County jurisdiction. If Escambia County will touch it with a 10ft (or whatever length) pole.
@ Wild man, @WMR, @ Whistling
Finally someone else can see what I think should be so obvious !!!! I’m not trying to excuse the recent issues, but this pot didn’t just start boiling. It may be boiling over now, but it didn’t just start boiling. And if you start with a large deficit in a small town that is ALREADY missing one of it’s revenue sources (gas bills), some of these issues will only be magnified. I’m just saying… I’m a working, tax paying resident, and I choose to live in Century!!!!!!
HOW LONG BEFORE THE COUNTY OR STATE STEP IN, AND SEND SOMEONE TO JAIL AND CLEAN UP THIS MESS IT JUST CAN’T KEEP ON GOING ON THE WAY IT IS NOW! WEAR ALL THE MONEY GOING ??? SO WE START A NEW SEASON AS CENTURY TURNS. !!!!!!
Must be in cahoots
I guess utilities will go up again it went up pretty good bit sense the Mayor got in
The audit is always a great cleanser. The audit firms and results for the last 5 years should be reviewed to get a clear picture of where fault should lay. This administration and council has its faults, every administration and council does, the depths of this issues in Century did not start two years ago. Where is the accountability to those folks
@wildman, you are correct. This mess that’s going on with the Town started long before this Mayor was elected and anyone with half a brain should know that. I remember that the Town had just received a Community Block grant just before Mayor McCall lost his bid for re-election. What happened to that money? Haven’t heard anything about it since. Those that have the authority should definitely look back at the previous administration. That’s probably the best chance of finding out why Century is in this financial situation.
“Century has endured this far, it will continue to endure in spite of the standards of outsiders.”
In spite of the standards of outsiders??? You mean, honesty, basic accounting, and good mathematics? Those standards? Unless I misunderstood, you’re insinuating that those standards are either non existent or don’t apply to the little town of Century.
It may have been set up the way they wanted it to be for the new mayor to start taking the fall.a lot mess was said when the other mayor left. One thing YOU got to understand that is people are very patient.left it all Munch for someone else to take the rap just saying let’s look back in time.
Not saying it’s the case here, but sometimes when there’s this much confusion concerning money. Someone is hiding some missing money.. let’s hope not..
Mayor and employees
terrible job the past two years in the financial business of the town.
Government fail from top to bottom, past and present– Future is what can be affected.
Council could remove this Mayor by a vote, declare a financial emergency to the state or call a vote to dis incorporate, put it on the ballot, make arrangements for continuing services.
You stepped up and were elected. Each and every one need to be aware of what and how to do the right thing going forward.
And the consequences of these decisions …
$2.7 million loan $300/ month payback is 750 years.
2.7 mil loan at 300 a month with bad credit. …… nice
Someone needs to step in and take over the Water and Sewage systems before it is to late and people lose their services. If the town is in this bad of shape, it is safe to say these two departments are on their last leg. Central Water Works could take over the water but why would they want the head ache, and the expense. If the Water System has been run like the rest of the town business, it is more than likely being run to failure. The same goes for the Sewer System, and this is very serious since the system discharges into Escambia River. The town needs to approach ECUA about taking over the Sewage system.
If they could some how convince Central Water Works to take over the water they would be better off than allowing Escambia River Electric to take it. ERA already controls the two water systems to the West of us.
Lock them up. This is absurd. How the hell are we gonna have someone that cant balance a budget run a city. This is ridiculous
BT
Thank you for the tip about “ALL THE QUEEN’S HORSES”. I cannot wait to see this movie. I am guessing that TOC is not sophisticated enough to pull off something like this.
Chris J Paul
Bankruptcy will do no good. The people created this mess. If you file bankruptcy, the same people will start all over again and run TOC back into the ground again.
The primary function of the TOC is to provide “free stuff” and welfare benefits for themselves and all their family and friends.
The Town of Century provides freebies to all the “good ole boys/girls” who lives, works or has relatives in Century.
There are no policies, procedures, internal controls or rules just handouts and freebies to anyone that “goes along”.
These people are not stupid or low informed individuals. Everyone is going along so they can get their free gas, free work vehicle, free personal loan, free work hours, and anything else that is not nailed down.
When will the gravy train stop?
Freeze all credit cards, freeze hiring and raises, freeze all spending other than what’s really really needed……should have done this yesteryear . ….. don’t blame everything on gas (although it’s the biggest issue)… there are many other internal problems that needs to be addressed. This is an emergency and council and mayor needs to act on it. You can’t govern in an emergency every 2 weeks . …….every penny spent even if in budget needs to be approved by council……….
There is a documentary called All the Queens Horses that everyone in Century should watch. It’s about embezzlementand mismanagement in a small town. Amazing how much damagejust a few people can do.
Declare bankruptcy.
Start clean
move on
“several receipts and/or other supporting documentation for charges made to the town’s credit cards were not maintained. This practice could result in the payment of unsubstantiated expenses. ” Run King Henry, Run!! They are on to you.
I totally agree with SW. Why is this ‘town’ allow to exist? Time to close up shops, move and leave for other destinations.
One can sweep dirt under a rug only for so long before it gets big enough to trip over it.
nothing can be said that hasn’t been stated over and over. question is, “when will it stop and how can we do it?”
STILL WANT TO SEE A LIST OF PEOPLE GETTING FREE GAS.
Best move ever I made 3 years ago was to love my family out of Century with my business.
It was abundantly clear what was being filtered through Century with no external state oversight..reports from the entities involved were just as convoluted and jaded as the managers ,including past participants in the affair
the reason is in the picture above.
This is all about expectations, ability/capability and limitations.
Century has endured this far, it will continue to endure in spite of the standards of outsiders.
It’s business as usual in Century, as long as there’s no negative consequence to the leaders, then why would behavior change. The town government is a useless and needless layer of bureaucracy, the county could do everything they do, but cheaper and more efficiently. It’s time to get dissolution of the town government on the ballot. Florida taxpayers are going to end up paying for this trainwreck either way.
When will someone, anyone be held accountable for this mess? Where does the buck stop?
Can anybody tell me why this continues to happen if somebody turning a blind eye how long can this keep going on
Is anybody really surprised?
And?
Day after day to year after year North Escambia gives the world a look at what is sure to be only the tip of the iceberg. There are no words to explain how this makes the people of Century feel. We are sick of it all. This has been going on for decades and it seems there is no way to stop it. To North Escambia, Thank you for exposing all of this to us and the world. Now please help us find a way to rid our good town of these crooks. What is the best legal way for us to remove them asap?
Absolute incompetence at its finest. If a citizen did this with our taxes, businesses, and bank accounts, we would be going to federal prison.
Can I get an interest-free $2.7 million loan with a payback of $300/month?!
This is beyond ridiculous. Throw in the towel.
Where are the state investigators?
Why isn’t the charter being revoked?
Why is this being allowed to continue?
Solution, lock them all up. Regular people go to jail for a lot less