Deidre Budahl of Casey Peterson and Associates’ Rapid City, SD office reported the results of their extensive audit review for Moorcroft’s 20016/17 fiscal year at Thursday night’s meeting. She shared several suggestions for the town to better track its own project funding, revenues and expenditures.
No violations were found in this year’s audit of Moorcroft’s accounting practices. With that said, Budahl started her recommendations by reiterating again the need to code transactions appropriately and consistently to keep better books and host an easier budget.
“When you’re not coding things right, it makes watching the budget difficult, you have no idea whether you’re in budget or not,” she said.
One example of a coding issue was noted regarding project funds deposited into and expenses transferring out of the same revenue account so a true reflection of the funding and expenditures in the account records was extremely difficult to discern.
“We did our best to break those out,” opined Budahl, “but Cheryl’s got that set up now so that should not be an issue going forward.”
After the discovery of miscellaneous accounts holding thousands of dollars of untracked monies, she again discouraged the use of “catch all” accounts when budgeting for projects.
“You really should budget those within the departments and the departments should have those listed and we will know from the financial statements to break that out into a capital item,” she said.
Budahl advised the use of spread sheets “if the accounting system cannot track everything appropriately”. For instance, each road project may not have to be separated individually; an account for all road projects can be created, but track the funding, like the match monies for a grant, in more detail on a spreadsheet.
Major construction projects can also get out of hand very easily with all of the change orders, advised Budahl, saying, “A lot of times these are public works projects so they get coded into water or sewer or the general fund somewhere and it really obscures what’s actually happening.”
Through a basic review of the bookkeeping processes that the town has in place, Budahl noted that the fire, ambulance and town center do not currently fall completely under the control of the town. “Again, that’s something we stress, the town needs to receive all funds for those activities, approve all the dispersments and also budget for the activities.”
However, she allowed that the town can set aside money that is received from donations for a specific purpose, “but they need to be tracked by the town, not by the group.”
Budahl discovered that the town has three accounts at Pinnacle Bank not accounted for in the records, two of which are titled “Halloween” and “DARE”. “They haven’t been active for quite some time so they shouldn’t be an issue, you probably can just close those accounts.” The “Bond and Bail”, though, is one that should be going through the town’s records.
Examining meter deposits, Budahl’s crew ascertained that the amount held in the account differs from the balance for the customer list. “It’s not unusual for there to be slight differences, but we recommend the amounts be reconciled,” she said.
While the audit is reported on a cash basis only and does not show liability accounts, Budahl also noticed that the payroll liabilities were not zeroing out every month, “which they should because you should be withholding payroll taxes and remitting them to the government.” She espoused Clerk/Treasurer Cheryl Schneider’s efforts working with Caselle and anticipates no problems in this area moving forward.
She and her associates also noticed that certain line items were not being tracked “the way they should” and with little documentation as to the true purpose of some of those funds. “We suggest that the town keep track of those a little bit better,” she said.
Paying attention to pending liabilities, Budahl advised the council that it is “good practice” to start funding the landfill closure now.
“Whether it is an assessment of a special fee to all your users that you’re collecting and setting aside for that purpose or designating some percentage of every year’s revenue within the town to go for that, you should really be setting that up [and] even once you’re done with the landfill and you close it, there is continuing remediation that you will have to do to monitor … and you’re going to need some money to do that,” she said.
Based on recommendations in the past, an MTC fund, a sanitary sewer project fund and a lagoon project fund has been established. These are basically set up to account for specific revenue the town may receive to complete a project and the related construction costs.
The enterprise accounts, or “proprietary” funds, including water, sanitation and sewer were discussed. The sewer operating fund was found to hold a negative balance of $67,000 while the sewer investment fund increased by $45,000.
“If those investment funds are not being held for debt requirements, you should probably transfer and zero out that negative,” advised Budahl.
The public safety expenses were up about $20,000; public works were down about $1.3 million because of the timing of the construction projects on the roads. Culture and recreation were up about $225,000, mostly related to the Westview Park project.
“Your general property tax decreased by about $20,000, your sales taxes were down about $90,000 and your other taxes were down by about $272,000 so you’re seeing some definite impacts from economic conditions hitting Wyoming,” said Budahl.
Budahl explained to the council some aspects of the federal audit that the town could potentially undergo due to receiving USDA funding in the coming fiscal year.
“We may be required to audit the town’s spending of that money. Those audits are much more intensive than anything you’ve seen, there are going to be some requirements and written policies in place. We haven’t found that there’ve been any issues with bidding at this point, but you have to have written bid policies, rules related to procurement, monitoring contractors and engineers’ compliance with different aspects of the grant,” she said.
By Grace Moore