Charles Saulter, CPA with MWH Group of Wichita Falls presented the audit at the last city council meeting.
The audit includes financial information for the fiscal year that ended September 30, 2013.
There are not a whole lot of changes between 2013 and 2012.
The audit shows that revenues exceeded expenses in the governmental or general fund by $941,154. Saulter said for the previous year, the city had a loss of $360,000.
“Going from 2012 to 2013, there was a turnaround of about $1.3 million,” he said. “There’s a number of factors for that, the biggest ones are, one, the gift you received of the swimming pool — the work that had been done on that and contributed to you and then y’all added some more money into it for further improvements. But that was given to you, almost $500,000 was the value of that.
“You had an increase of collection of property taxes for the year of about $133,000. Since we’re measuring the change from last year to this year, one of those items that in the previous year, you had some large expenses in connection with your fire station, about $400,000 worth of it. That was the previous year that you didn’t have here.
“Sales tax, between last year and this year, was up about $80,000.
That accounts for about $1.1 million of the $1.3 million turnaround in the governmental funds.”
The business fund, comprised of water, sewer and solid waste revenue and expenses, had a loss of $66,181. Salter said the loss last year was $83,000.
“A lot of the loss or income in one fund or another is dictated by how much you transfer from your utility fund to your general fund which is generally quite a bit,” he said.
“So overall, the net income for the city was about $874,000. Whereas a year ago, it was a loss of $421,000. So it’s a big turnaround. Some of that turnaround is one time items.”
Saulter said the firm realizes the city has an investigation going on right now. The investigation he referred to is that of Erica Hobson, former city finance director who was arrested late last year for theft of city funds through overpaying her own salary and credit card transactions. As a result, the auditors expanded their procedures in certain areas.
“We increased our testing in certain items,” he said. “We looked more closely and at greater depth at specific accounts. As a result of doing that, we developed a list of recommendations that we think (the City) might want to consider implementing. We’ve talked to city management about those and some of those have already been implemented now and others to follow.”
The auditor’s report showed deficiencies in internal controls meaning the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct, misstatements on a timely basis.
One deficiency was determined a material weakness in payroll.
To read the entire article, see the June 10 edition of the Gazette-News.