Error found by state auditor already dealt with

Alexander city council members heard a report Monday evening from Mayor Paul Mitchell concerning the audit of the 2016 calendar year conducted by the Arkansas Division of Legislative Audit. The most egregious of the violations listed was dealt with during the January meeting. The violation concerns paying city employees for additional work outside their usual duties without an ordinance permitting the practice.

The audit states, “The City paid the District Court Clerk $842 for cleaning services without an authorizing ordinance, in noncompliance with Ark. Code Ann. § 14-42-107.” The $842 was for one year of cleaning services.

At the regular January meeting council members approved an ordinance, “Permitting council members, officials, or municipal employees to conduct business with the City of Alexander.” The ordinance sets a maximum annual dollar amount of $2,000.

As he did in January, Mitchell explained the court clerk has been paid extra to come in when city hall is closed to clean. Mitchell said hiring city employees for other jobs has been a common practice in the past by other mayors. Since no existing ordinance could be found one was written and approved by the council.

That was the only violation attributed to the mayor and one of several violations attributed to the treasurer. Others listed in the treasurer section included;

"1. Bank reconciliations were not always accurate and approved by someone other than the preparer, as required by Ark. Code Ann. § 14-59-108.

‘2. Invoices and supporting documentation again were not always maintained, as required by Ark. Code Ann. § 14-59-105.

‘3. Fixed asset records were established, but did not include additions, deletions, control totals, serial numbers, and descriptions of property and amounts, as required by Ark. Code Ann. § 14-59-107. A similar finding was issued in the previous report.

‘4. In 2014 Sales and Use Tax monies were not prorated correctly. As a result of these transactions, $42,617 is due to the Police Fund from the General Fund at December 31, 2016. A similar finding was noted in the previous report.

‘5. As noted in the previous report, restricted monies were paid from the Parks and Recreation Fund to the General Fund. As a result of these transactions $46,254 is due to the Parks and Recreation Fund from the General Fund at December 31, 2016.

‘6. Two Rural Fire Protection Fund warrants totaling $16,610, issued to the City on November 21, 2016, were not deposited until January 20, 2017.

‘7. The City did not establish by ordinance a method that provides for internal accounting controls and documentation for audit and accounting purposes for a private contractor, as required by Ark. Code Ann. § 14-59-115.”

Bookkeeper Jo An Churchill told council members half of the $42,617 and $46,254 have been returned to their respective accounts. The two transactions occurred during the 2014 calendar year when Michelle Hobbs was mayor. Because the years 2014 and 2015 were both audited in 2016 the report wasn’t completed until last year, which is when the mayor and council were made aware of the financial errors.

Other “non-compliance” issues listed in the audit are;

District Court Clerk

“Balances remaining in the bank again were not identified with receipts issued for cases not yet adjudicated and payments made on all unpaid time accounts, as required by Ark. Code Ann. § 16-10-209.”

Police Chief

• “A list of all uniform written citation books was established for 2016, but did not include each book.
• ‘Uniform citation books were not issued sequentially.
• ‘Completed ticket books were not turned over to the District Court Clerk in a timely manner.”

“A similar finding was noted in the previous report,” according to the audit.

In 2016 the city had two police chiefs. John Fenton resigned February 12, 2016 and was replaced by Robert Burnett who was hired March 21, 2016.

Mitchell said he has already sent a response to Legislative Audit explaining how the errors will be fixed. That included passage of the ordinance in January. The auditing of 2017 has already begun.

In other action at the March 19 meeting;

Council members approved the Electronic Transfer of Funds between accounts when writing a check is not an option. Bookkeeper Jo An Churchill told council members in December, 2017 money needed to be transferred from the general fund to the fire department fund for a check to clear. Normally she would write a check but no one with the authority to sign it was available so she transferred the funds electronically. Checks must have two signatures. She said she was asking for council approval in case that situation ever occurs again.

The next regular meeting of the Alexander City Council is Monday, April 16. Meetings start at 6 PM and are held in the courtroom at the City of Alexander City Hall. The public is invited to attend.