• Home
• News
• Events
• Features
• Sports
• About
• Contact
• Advertise

Latest Headlines

• County To Continue Discussions On Latest Offer For OLF-8 Property
• Sunny Skies, Middle 70s For Tuesday
• Locals Make New $22.5 Million Offer For OLF-8 Property
• Century Mayor Reports Entire Playground Stolen; ECSO Says It Was Scrapped For $196
• Vehicle Rolls On Kingsfield Road After Hitting Bridge
• Beulah Middle FFA Teams Places 7th In Florida In Meat Identification
• Escambia Woman, 20, Gets 15 Years In Prison for 2022 Double Fatal Crash
• Florida Gas Prices Rise 13 Cents; Set New 2024 High
• Blue Angels Thrill, Rocket City Blasts Past Wahoos In Series Finale
• Escambia Considers Widening 2.16 Miles Of Dangerously Narrow Highway 164; Barry Promises More

Century Approves Audit, Action Plan To Get Out Of Financial Problems

The Century Town Council voted unanimously Monday night to accept the findings in their audit for the fiscal year ended September 30, 2019.

As NorthEscambia.com reported Monday morning, the audit shows signs of a financial emergency as defined by state law and a multi-million deficit.  The audit found the financial emergency conditions exist due to missed debt service payments, not transferring payroll taxes in a timely manner and issuing payroll checks without sufficient funds in the payroll account.

As part of Monday nights vote, the council also approved their response in the form of a corrective action plan as recommending by the auditors. The council did not specifically discuss the plan or its contents.

Below is a summary of audit findings, with recommendations as made by the auditor and Century’s plan to correct the problems. For more specific details on the audit findings, click here for our previous story.

FINANCIAL CONDITION

Finding

The town’s overall financial condition demonstrates signs of a state of financial emergency as described in Florida statutes. 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. This condition has existed for the past three audited periods.

Recommendation

Develop long and short-term financial plans to improve its financial condition. The financial plans should include: (1) a review of spending needs; (2) a system for monitoring revenues and expenditures; (3) budget reserves to provide for future capital needs and unexpected costs; and (4) projected revenues sufficient to cover projected costs. The town should analyze existing rate structures for proprietary operations to determine their sufficiency in covering expenses and should explore all available options to increase revenues or decrease expenditures. In an effort to improve the financial stability of the Natural Gas Fund, the Town should actively monitor natural gas usage against the purchased gas to evaluate areas of weakness in system.

Town Response

The town is aware of the deteriorating financial condition caused by the gas fund. Currently, the town is working on procedures to resolve the deficit in the gas fund. The town has hired a former city manager to act in the capacity of city manager and make recommendations to the council. All other funds are self-sustaining. Once this is resolved, the town will be able to set aside reserves for each fund. The town is in the process of computing a bill for previous usage not billed as a result of a faulty meter.

The amount owed to the special revenue fund by the general fund and natural gas fund are currently being evaluated for forgiveness based on eligible prior year allowable expenditures incurred.

The 2019-2020 budget will be amended to reflect payments on bonds for the gas and water/sewer Fund from the LOST funds not recognized in prior years. This will alleviate the pressure on these funds to fund the bond payment and allow the town to fund reserves needed to maintain these funds pursuant to an asset management plan being developed.

CASH MANAGEMENT

Findings

Cash management findings included a payroll account that was overdrawn numerous times, late payroll tax submissions to the IRS, payroll checks provided to employees and cashed before the issued date of the check, an overdrawn payroll account, late fees on credit cards, and late and missing debt service payments.

Recommendation

The town council should receive timely information about the cash position and cash needs of the town to ensure adequate funds available for weekly paychecks, payroll taxes, and debt service payments. the town management should review the payroll bank account weekly and ensure adequate transfers from other available cash accounts are completed on a timely basis for adequate payment of paychecks, payroll taxes and other payroll items. In addition, credit card invoices should be paid timely to avoid late fees and interest charges.

Planned Correction Action

We agree with the recommendation. The town’s payroll account is now reviewed weekly (on Fridays), and anytime shortages occur, the council is made aware through an emergency meeting the following Monday. The town clerk will monitor all payments on credit cards to ensure timely payment on or before the due date.

CREDIT CARD USAGE POLICY AND RECEIPTS

Findings

The audit noted that multiple receipts and supporting documentation for credit card charges was not maintained. The business purpose of several credit card transactions was not documented, particularly on purchases of food, fuel and various supplies. The town does not have a policy requiring employees to provide receipts for transactions nor document purpose of purchases.

Recommendation

The town should require supporting receipts be submitted for all charges and that the business purpose of the expense be clearly documented. In addition, the town should adopt a policy that clearly outlines the appropriate uses of the town’s credit card and responsibilities for each card holder.

Planned corrective action

We agree with the recommendation. The town will adopt a policy where credit cards are “checked out” from the main office and returned with the receipts upon “check in”.

RECONCILIATION OF ACCOUNTS

Findings

Interfund general ledger accounts were not reconciled. Audit adjustments were required to adjust for the actual audited amounts and allow for proper balancing of the interfund accounts. The same problem has existed for three consecutive years.

Recommendation

We recommend all general ledger accounts be reconciled monthly subsidiary ledgers, and any reconciling items be promptly investigated and adjusted, adequate supporting documentation for the adjustments be maintained.

Planned corrective action

We agree with the recommendation. The town reconciles accounts on a monthly basis; however, these required adjustments were isolated, and management will ensure the interfund accounts are reconciled in the future.

CAPITAL ASSET TRACKING

Findings

There are capital assess that have not been correctly recorded in the town’s records, and the town has not completed an inventory of assets. The condition was also found in the 2018-2019 audit.

Recommendation

We recommend town management procedures surrounding capital asset identification and tracking to ensure the capitalization threshold is properly and consistently applied. In addition, town management should ensure are consistently tagged for inventory and added to the town’s capital asset record.

Planned corrective action

We agree with the recommendation. Currently, the twn tags assets and accounts for assets on a “tagging” basis. The town also uses this list for insurance purposes as well. However, the actual depreciation schedule reconciliation has not been done and this procedure will be implemented.

Pictured top: Councilman Luis Gomez (right) listens as  Kristen McAllister of the auditing firm Warren Averett addresses the Century Town Council Monday night. NorthEscambia.com photo, click to enlarge.