Century Approves Audit, Action Plan To Get Out Of Financial Problems
February 18, 2020
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.
Volunteer Need For Escambia County Board Of Adjustment Appointment
February 18, 2020
The Escambia County Board of County Commissioners is seeking Escambia County residents interested in volunteering to be considered for an at-large appointment to the Escambia County Board of Adjustment.
Members serve a two-year term of office and meet at 8:30 a.m. on the third Wednesday of each month for approximately two hours. Travel is not required. Financial disclosure is required.
Escambia County residents interested in being considered for a possible appointment to the Escambia County Board of Adjustment to begin serving in April are asked to submit a resume and letter indicating their desire to serve by close of business on Wednesday, March 11. Letters and resumes should be submitted to Kayla Meador, 3363 West Park Place, Pensacola, FL 32505; or emailed to krmeador@myescambia.com.
Resumes submitted to a BCC agenda for consideration will become part of the official minutes and are subject to public records requests.
ESCO: 15-Year Old Shot Multiple Times In Brownsville
February 17, 2020
The Escambia County Sheriff’s Office is investigating the shooting of a 15-year old Monday afternoon.
It happened just before 4 p.m. on Brainerd Street near Shoemaker Street in the Brownsville area . Deputies arrived to find that the teen had been shot four times — once in the stomach and three times in the arms. The victim was transported to an area hospital and is expected to survive.
The ECSO the victim was not being cooperative with law enforcement.
Five Shot In Pensacola Drive-by; One Is Dead
February 17, 2020
Five people were shot in drive-by shooting Sunday night in Pensacola.
One of the victims is dead and four others were injured. Some of the injuries were critical, but the individuals are expected to survive.
It happened at a small home on Gadsden Street, not far from West Cervantes Street and A Street. Police said about 30 rounds were fired from a car just before 11 p.m. Police said they believe the house was targeted.
There are no suspects or vehicle description at this time as Pensacola Police continue their investigation.
Anyone with information should call Crime Stoppers at (850) 433-STOP.
File photo.
One Critically Injured In 10 Mile Road Crash
February 17, 2020
One person was critically injured in a single vehicle crash on 10 Mile Road just east of the railroad tracks Monday morning.
The vehicle left the roadway and hit a utility pole and a tree, ejecting the adult male driver. He was transported to an area hospital by Escambia County EMS as a trauma alert. His name has not yet been released as the Florida Highway Patrol investigates.
The roadway remained closed as Gulf Power worked to replace the pole, which was snapped in the 6:37 a.m. collision.
NorthEscambia.com photos by Kristi Barbour, click to enlarge.
Florida Gas Prices Decline To Lowest Level Of The Year
February 17, 2020
Florida gas prices are continuing to slide downward, falling nine cents in the past 11 days to the lowest level this year.
Sunday’s state average of $2.33 per gallon is 6 cents less than a week ago, and 23 cents less than last month.
The average price per gallon Sunday in Escambia County was $2.30, while in North Escambia one Cantonment station was at $2.27 Sunday night. That’s a local increase of a penny from last week.
“Florida drivers continue to benefit from strong refinery output and low fuel demand, which have contributed to the seasonal slump at the pump,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “Unfortunately, these low gas prices may not linger terribly long. Florida gas prices could rise anywhere from 20-60 cents this spring, as demand rises and refineries switch to the more expensive-to-produce summer gasoline.”
U.S. Senate Honors National Champion UWF Argos Football Team
February 17, 2020
The University of West Florida’s national champion football team was recently honored by the U.S. Senate.
Senators Rick Scott and Marco Rubio submitted the resolution “”Commending the University of West Florida Argonauts football team for its National Collegiate Athletic Association Division II national championship victory”. It passed the senate unanimously.
Click the resolution below to enlarge.
Century Audit Finds Millions In Deficits, Signs Of Financial Emergency
February 17, 2020
A draft audit shows signs of a financial emergency in Century and multi-million dollar deficits.
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.
“The Town has experienced significant financial difficulties over the last few years and subsequent to year-end,” according to the audit for the fiscal year ending September 30, 2019.
The audit found of the town finished the year with a $3 million general fund deficit for governmental operations. Assets exceed liabilities at the close of the year by $5.8 million. But of that amount, $4.9 million was in capital assets (property, roads, drainage systems, etc.) and $3.9 million was restricted by debt service payments and other uses.
The business activities of the town — such as water, sewer and gas — had a balance of $540,000 in unrestricted net funds. The natural gas fund lost $263,000.
Across the board, the town had an unrestricted net position of a $2.4 million deficit.
The town failed to make debt service payments due in March 2017, 2018 and 2019 on gas system revenue bonds.
As of September 30, 2019, there was a deficit balance in the general fund of $3 million and in the natural gas fund of $1.7 million. Both of these funds have borrowed significant amounts from other funds of the town.
Audit findings included:
Financial Condition
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.
The natural gas fund borrowed $222,000 during the fiscal year from the general and water and sewer funds to cover general operations. In June 2018, the town council approved a repayment plan of $300 per month for $2.9 million borrowed inappropriately from the restricted special revenue fund. The audit noted the town should evaluate costs incurred in prior years for possible reclassification, if such costs met the nature allowed for infrastructure improvements.
This condition has existed for the past three audited periods.
The auditors recommended that the town develop long and short-term financial plans to improve its financial condition.
Cash Management
- The Town experienced the following cash management issues during the fiscal year:
- 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 natural gas fund.
- Inadequate funds held for customer deposits in the natural gas fund.
This was a recurring finding not corrected from the previous fiscal year’s audit.
The problems are caused by the town council not receiving timely information about the cash position and cash needs of the town which has prevented timely transfers of cash between bank accounts. Turnovers in the town clerk and department leadership over the past few years was also cited, along with operating deficits in the natural gas fund.
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 audit states. It was also noted that credit card payments should be made on time to avoid late fees and interest charges.
Credit Card Usage Policy and Receipts
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.
The previous audit found the same problem.
Reconciliation of Accounts
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.
Capital Asset Tracking
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.
Town of Century Response
The Town of Century will submit a corrective action plan to address the audit findings. The town council is expected to discuss, and perhaps approve, their responses during meetings Monday night. NorthEscambia.com will publish an additional story with the town’s responses.
The draft audit must also be approved before being submitted to the state.
Pictured: The Century Town Council meets on February 3, 2020. NorthEscambia.com photo, click to enlarge.
Escambia County Meetings This Week
February 17, 2020
Here is a schedule of Escambia County public meetings this week:
Monday, February 17
Escambia County Offices Closed Presidents Day – All Day.
Tuesday, February 18
Board of Electrical Examiners Meeting – 9 a.m., 3363 West Park Place
Pensacola-Escambia Promotion and Development Commission – 10 a.m., 418 W. Garden St.
Florida-West Economic Development Alliance Board of Directors – 1 p.m., 418 W. Garden St.
Escambia County Health Facilities Authority – 4 p.m., 1019 N. 12 Ave.
Board of Adjustment – 8:30 a.m., 3363 West Park Place
Development Review Committee – 1 p.m., Escambia County Central Office Complex, 3363 West Park Place
Human Relations Commission – 4 p.m., 3200 W. De Soto St.
Public Workshop on Carpenter Creek and Bayou Texar Plan – 6 p.m., 6000 College Parkway
Thursday, February 20
Board of County Commissioners Public Forum – 8:30 a.m., Ernie Lee Magaha Government Building, 221 Palafox Place, BCC Meeting Room
Board of County Commissioners Regular Meeting – 9 a.m., Ernie Lee Magaha Government Building, 221 Palafox Place, BCC Meeting Room
Escambia Soil & Water Conservation District Board – 9 a.m., 151 Highway 97, Molino
No Arrests In Armed Robbery Of North Escambia Liquor Store
February 16, 2020
The investigation is continuing into the armed robbery of a North Escambia liquor store a couple of months ago.
A black male wearing a camouflage jacket and a camouflage mask walked into the Grey Goose Liquor Store on Highway 97 at the Florida-Alabama state line on December 6 and demanded money, according to the ECSO. So far, there have been arrests.
The Grey Goose robbery came just two days before the armed robbery of the Piggly Wiggly grocery store in Davisville (click for previous story). The two businesses are about 1,000 feet apart.
Two people have been arrested for the grocery store holdup, but the Escambia County Sheriff’s Office has said the two robberies are not believed to be related.
Anyone with information on the December 6 robbery of the Grey Goose is asked to call the Escambia County Sheriff’s Office at (850) 436-9620 or Crime Stoppers at (850) 433-STOP. Crime Stoppers callers are eligible for a cash reward and do not ever have to provide their name.
NorthEscambia.com photos, click to enlarge.
