Special to the Times
At its regular meeting on August 20, 2024, the Lake Butler City Commission received its annual audit report for the fiscal year period of Oct. 1, 2022, through Sept. 30, 2023.
During the presentation, the auditor from James Moore noted that the city is still recovering from the misspending of the previous city manager but that the financial condition of the city is not positive.
The general fund balance was at a three-year low, at $462,887 (down from $466,220 at the end of the previous year, which was down from $542,511 the year before). The CRA funds were also in a deficit of $9,815. Despite this, the audit received an unqualified opinion.
Material weaknesses were observed, mainly in the internal controls for the fuel purchasing system, the journal entry controls, and the payroll process. However, the City Finance Director, Dave Mecusker, stated that these matters had been dealt with when first noted by the auditors. It was pointed out in the audit report that all but three of the material weaknesses from the previous fiscal year’s audit had been addressed and corrected. These weaknesses included credit card abuse, questioned costs, the property exchange between Johnny Welch and the city, Internal Revenue Service Noncompliance, employee leave records, the bidding process, audit solicitation, and the ARPA grant funds.
Overall, the audit states that for the 2022-23 fiscal year, the city was in a financial condition, indicating a deteriorating financial condition that could lead to various emergency financial situations.
This is in the process of being corrected, beginning with the firing of the previous city manager and general belt-tightening on spending in the subsequent budget for the current fiscal year.
All of the misspending, questionable spending, transfers from one account to another to cover excess spending and the misuse of grant funds has stopped.
Currently, the city is meeting its debt obligations, staying within the limits of a tight budget, looking for new sources of revenue, and watching all spending very closely.
Mecusker and the auditors said it is on the road to recovery, but there are still more miles to travel before everything is in great shape again.
New City Manager Kimberly Hayes responded to the auditor’s concerns in a representation letter, outlining the steps the city has taken to shore up deficiencies and correct noted problems.
The city finance department is reviewing all account balances with an emphasis on year-end closing adjustments, which will be reviewed monthly/quarterly to provide accurate accounting information. A policy has been established that all city vehicles will be used for city business only. Each city employee assigned a vehicle will maintain a fuel/maintenance log that the public works director reviews, the finance director, and the city manager before any invoices are approved or paid. A new policy will provide additional review and approval for journal entries and electronic fund transfers. Inventory and fixed asset procedures are being updated and will be implemented as of Sept. 30, 2024. The administrative assistant position to the city manager has been re-established, and human resources responsibilities have been assigned to it, including supervising payroll matters. Utilizing city employees as contractors have been stopped, and the city has opened six new checking accounts to care for grant funds properly.
