Column/City Finances: Building Trust?? Part II

Published 12:00 am Saturday, October 7, 2006

During the City Council meeting on Sept. 25, the fiscal year 2007 budget was presented by the mayor and passed – with dissent coming from councilmen Williamson and Cain. These two Council members both objected to the mayor’s refusal to hold a new budget work session on Sept. 21 – a practice that has been in effect in prior years during the Perkins administration.

For whatever reason, the mayor insisted on a new budget vote omitting the usual work session that would have allowed all Council members to scrutinize and discuss the new ’07 City budget in detail.

After six years in office, it has become obvious that Mr. Perkins prefers secrecy to full disclosure when it comes to the City’s finances as he seems to ignore that it his responsibility to keep Selma’s voters and taxpayers fully informed on money matters and other public information.

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In looking at Selma’s past budgets since 2000, it is well known by many interested observers that our city government has literally failed every financial audit since Perkins took office. An example is the 2005 Management Audit Letter submitted by the Certified Public Accountants & Consultants-Wilson Price Barranco Blankenship & Billingsley-Montgomery, Ala., on Dec. 10, 2005.

This is the Audit Management Letter that prompted Mayor Perkins – in his May 8, 2006, memorandum that was distributed to the members of the City Council – to apparently admonish two members of the Council.

I quote, “Please remember this is a management tool and should not be used for slander nor should it be publicized. Know that if either of you attempt to use this information to attempt to embarrass personnel or cause controversy in any way then I have no choice in refusing future requests for any audit management letters.”

The Mayor can rest assured that this Letter/Memo did not fall into my hands via any member of the Council. The main point here is that our mayor appears to fear public disclosure of the City’s finances and wants to keep the taxpayers in the dark. Obviously, this is a very poor way to build trust among his constituency, and he should be called to account for this shameful policy. In reviewing the ’05 Management Letter, it is easy to see why the Mayor wanted to shield the contents of this document from the public.

Frankly, I was shocked by the pointed, negative comments that were sprinkled throughout the report by the auditors. The cover letter sent to the Mayor and the Council criticized internal controls, referring to “significant deficiencies” that could affect the accuracy of financial statements.

“Material weaknesses” were detected regarding certain reportable conditions. It was noted that general journal entries lacked proper approval by a responsible employee.

Also, the auditors found seven account groups that had not been reconciled or agreed to the general ledger.

Additionally, the year-end receivables and payables had not been reconciled. It was noted, as well, that the City does not have an accounting procedures manual. Other complaints involved the failure to perform the required inventory count as well as the fact that the City “does not have a well-defined, written disaster recovery procedure.”

The final page of the ’05 Audit Management Letter stated, “this year’s closing process was marked by confusion, delays, and problems caused by miscommunication among accounting personnel.”

This brings up the obvious question:

How in the world can Selma’s citizens have any FAITH or TRUST in City government when there are all of these discrepancies and shoddy accounting practices going on in the Financial Department at City Hall??

Byrd Looper is a regular columnist for The Times-Journal.