CENTER — Center Town Board met Tuesday to review its audit with Wall, Smith and Bateman auditor manager Jessica Bogner, who told them that while the financial situation in the town has grea reas continue to linger.
Bogner commented that the audit opinion was unmodified, “which is what you want.” The town currently has $5.1 million in total current assets and $1.6 million in long-term liabilities. Total revenue was $1.5 million and total expenditures also were $1.5 million.
There were only 13 adjustments to the budget this year compared to 36-40 adjustments in years past, she noted. “You have slowly gotten better and better,” she complimented the town. “ I wasn’t here long this year — only three days. A year ago it was a month.”
There were no difficulties encountered in performing the audit and the errors that were discovered were “not material,” Bogner added.
Bogner told the town that internal controls, long cited as a concern in the town’s audits, are still a problem, noting there are errors in the town’s journals. She called this a material weakness and said the town does not have a proper system of controls to keep its books in order.
“These books can go to a mess in a hurry and take a long tome to correct,” Bogner observed. She said she found invoices that had not been updated and accurately reconciled with expense accounts. There were handwritten checks signed by only one signer and vendors were paid for services not yet completed. She advised that more than one person must review all checks and invoices.
Trustee Mary McClure asked Bogner how thorough she felt the audit was and mentioned the problematic history of the recently departed treasurer for the town. She replied that her auditing firm could come back to do special tasks if the town desired. Because there is a long list of material weaknesses, Bogner said, this creates the potential for material misstatements.
Additional problems pointed out by Bogner in the accompanying audit notes include:
• Expenditures in the street improvement and water funds exceeded appropriations in 2016. This may be a violation of Colorado State Statute 29-1-110.
• The town budgeted a negative fund balance in the General Fund of $205,879 and had a negative fund balance of $165,528 as of Dec. 31, 2016. This may be a violation of Colorado Revised Statutes.
• $2,405,432 of the town’s deposits were exposed to a custodial credit risk and may not be returned to it in the event of a bank failure. Eligible depositories for cash deposited by public institutions in Colorado must carry FDIC (federal insurance) on deposits held.
• The town does not have a formal investment policy calling for diversification of investments as required by Colorado State Statutes. The town also is at an interest rate risk.
• The town once again overpaid light, power and gas taxes.
• Capital asset listings were not updated and maintained
• The town is not keeping track of who is authorized to use its credit cards and what charges are made.
• Not all employee pay rates are included in employee pay files.
Trustees balked at sending the audit in by July 31 without having it looked over again.
“I hate to send it to the state and then have there be issues,” Bogner said. “I have never had to amend an audit.”
Trustees voted to apply for an extension of the audit deadline and subject the audit to further review.