City assets outweigh liabilities, audit shows for fiscal year 2015

BY Jan Murray

City assets outweigh liabilities, audit shows for fiscal year 2015
With assets of $18,940,849 and liabilities of $10,137,287 at the end of fiscal year 2015, it appears the city of Daleville is healthy financially.The accounting firm of Carr, Riggs and Ingram in Enterprise has completed its annual audit of the city’s finances. Keith Hundley, certified public accountant, presented the completed audit for 2014-2015 to the city council during last week’s regularly scheduled council meeting.According to a bound copy of the audit, the firm evaluated the financial statements and municipal procedures for governmental activities, business-type activities, the general fun, the debt-service fund, the water and sewage fund and aggregate remaining fund information.“In our opinion…the financial statements referred to…present fairly…in all material respects, the financial position of the governmental activities and each major fund of the city as of Sept. 20, 2015,” the report states. “Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the city’s basic financial statements.”The aforementioned assets include cash, cash equivalents, renewables, unbilled revenues, internal balances, prepaid expenses, net pension assets, restricted cash and cash equivalents, land and other nondepreciable assets and capital assets/net of depreciation.The liabilities mentioned above include accounts payable, cash bonds payable, accrued expenses, money due to other governments, accrued interest, compensated absences and bond payable.Total revenues received by the city in fiscal year 2015, according to the report, totaled $3,872,595. Those revenues were derived from taxes, fines, forfeitures, licenses, permits, charges for services, intergovernmental, investment earnings and miscellaneous.The report states that total expenditures from the general fund for the same period totaled $4,805,394. Of that amount, $992,807 was spent for general government; $1,471,507 for public safety; $375,333 for health and sanitation; $422,211 for culture and recreation; $184,899 for streets and roads; and $32,302 for capital outlay.From the debt service fund, total expenditures were for principal, interest, dues, fees and issuance costs, the report states.As far as “business-type” activities such as the Water and Sewer Fund and the Rescue Squad Fund, total current assets for those are listed in the report as $9,563,935 and total liabilities of $2,485,887. Total operating revenues for the two funds is listed in the report as $$1,334,072 and total operating expenses as $1,231,844. The largest sources of revenue for both funds come from charges for services, the report states, and the largest expense for both is salaries—second only to depreciation and amortization—at a cost of $283,610 total.Non-major governmental funds were also audited, including the four-cent and seven-cent state gasoline tax fund, the corrections fund, the fire department fund, the E-911 fund, the judicial administrative fund and the capital improvement fund.Auditors noted in their summary that the city “failed to maintain adequate supporting documentation of charges for services reported by the rescue squad. The report attributes the failure to “a change in personnel…created a lack of knowledge related to prior charges and no detail of transactions reported…The city’s management acknowledges the finding and will require personnel charged with administering the procedures over revenue to properly document each run.”Auditors also noted a check and balance issue in the Water Department. “During our audit, we noted that there is a lack of segregation of duties in the utility billing process,” the report states. “The accounting specialists prepares, reviews and prints the utility billing statements and is also responsible for processing cash receipts as customers come in to pay their bills. Thus, the accounting specialist has access to both the asset (cash) and the recordkeeping for the asset, which increases the risk for misappropriation of cash.”Mayor Claudia Wigglesworth said all recommendations are being taken under consideration and will be dealt with as needed. The report states, “Procedures related to proper segregations of duties over cash receipts will be established and placed into daily operations.”Finally, the audit indicates that “no instances of noncompliance or other matters” required to be reported under Government Auditing Standards were found.Other funding resources and expenses are noted in the report and can be viewed by the public at city hall.
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