Audit accepted, questions remain

At their July 21 meeting, the Saratoga Town Council formally accepted the Fiscal Year 2018/2019 audit from Carver, Florek and James (CFJ) as the 2020/2021 fiscal year begins. Along with the highly anticipated document came additional questions from Councilmember Jon Nelson in regards to the town’s finances.

Councilmember Bob Keel was not in attendance as he was “tied up at work” according to Mayor John Zeiger.

More or Less?

The release of the audit followed the 3-1 approval of a representation letter to Carver, Florek and James (see “Concerns over representations” on page 10 of the July 15 Saratoga Sun) at the July 7 meeting of the governing body. In addition to the audit, an end of audit letter was sent from CFJ with additional concerns.

“One of the statements that the auditors provided us with in their end of audit letter was that, I’ll just read it, ‘During our review over the published board meeting minutes and expenditures, we found that not all expenditures and journal entries were being included in the warrant listing approved by the town council. We recommend that all expenditures, journal entries and automatic withdrawals that occur be included in the financial package provided to the town council for approval. Additionally, we recommend these be published along with meeting minutes and agendas on the Town’s website,’” said Nelson.

Nelson stated that the concerns expressed by CFJ in the letter related to questions he asked in September 2019. During the September 3 meeting (see “Financial inquiries” on page 1 of the September 11 Saratoga Sun), Nelson asked treasurer Sammy Flohr and clerk Suzie Cox if the amount being approved for payroll was gross or net payroll and, if it was gross payroll, why the payroll liabilities were being included. On September 17, Nelson asked if the Town of Saratoga was running a deficit after reading the monthly financial statement provided to the council (see “Financial questions continue” on page 1 of the September 25 Saratoga Sun).

The council member then stated that, following the letter from CFJ expressing their concerns about the discrepancy between was was approved and what was expended, he had compiled data for the last fiscal year using amounts listed on the agendas and comparing it to the most recent financial report, which ended June 30, 2019.

“What I found was that, over the course of the last fiscal year, this council approved $3,763,649 of accounts payable, payroll and liabilities and that includes everything for the general fund as well as any of the enterprise funds,” Nelson said. “Basically, that is the sum total of everything that we were presented with and asked to approve and, ultimately, did approve through our council meeting. The June 30 statement which, again, would summarize everything that occured—all the expenditures that took place in fiscal year 19/20, has a total of $3,944,927.”

The difference between those amounts came to $181,278.

“I would ask if there’s any light that can be shed on what that additional money was used for, what it was paid to,” said Nelson.

“It would be extremely beneficial to us if he would give us, in writing, those statements, so that we had something that we could look at to do some research,” replied Cox. “I’d be glad to do that before the next council meeting but to just bring it up in a council meeting is not fair to us.”

Zeiger stated that he agreed with Cox and asked that Nelson submit his request in writing. Nelson agreed to the request, adding that he would also be requesting the complete ledger for the most recent fiscal year and all bank statements for Fiscal Year 2019/2020 including June 2019 and July 2020.

Audit Accepted

Later in the meeting, the receipt of the audit was discussed with Nelson asking if the council should accept receipt of the document. Zeiger stated that it was necessary for the council to formally accept the audit, which was done with a 3-0 vote. Following the vote, Nelson asked both Zeiger and Councilmember Judy Welton their thoughts on the findings listed in the audit and how they should be addressed.

“Personally, I’d like to wait until Bob’s here, too, to get his input so we do it as a council,” replied Zeiger.

Nelson also asked if the governing body was still engaged with James Childress and if the third-party accountant was still doing monthly bank reconciliations for the Town of Saratoga. At the February 18 meeting of the Saratoga Town Council (see “No body, no crime” on page 16 of the February 26 Saratoga Sun), among the duties assigned to Childress was aiding in bank reconciliations and to reconcile amounts approved by the council from January 2019 to October 2019.

“I accept that there’s no information to be presented tonight as to why there is a discrepancy between what we’re being asked to approve and what’s going out the door and that we’ll look forward to having that at the next meeting. But I would also ask that James follow through on what he was tasked with back in February, which was going back and reconciling those amounts,” Nelson said.

A final question from Nelson related to adjustments made to fund balances between March and April (see “Questioning changes” on page 1 of the April 29 Saratoga Sun). At the April 21 meeting of the governing body, concerns were raised by Nelson in changes made to the water fund, sewer fund, landfill fund, and weed and pest fund.

“I don’t know how to treat that if the auditors are taking exception to the statements of those funds as presented,” said Nelson. “So, another way to put that would be, we presented fund balances to the auditors that show significantly lower balances in the enterprise funds and one of their findings was that, clearly, they take exception to that and they say that those fund balances may not be accurately presented.”

Nelson asked, if the auditors were taking exception with those fund balances, how would the Town of Saratoga reconcile those changes within their accounting system.

“I think that’s a question for Childress, too,” replied Welton.

The council voted unanimously for Welton to contact Childress with the questions raised by Nelson before the next meeting of the governing body.

The next meeting of the Saratoga Town Council will be at 7 p.m. on August 4 at Saratoga Town Hall.