Audit turns up some positives
Often beleaguered because of its finances this year, the City of Selma received some good news. Its independent auditors announced Thursday the city has an unqualified audit, which means at its most basic, the auditors noted no exceptions to generally accepted accounting principles (GAAP) in their client’s books and records. Consequently, they were not required to add any qualifications to the audit report.
But the audit did not come without some comments from Borland Benefield, the auditors hired by former Selma Mayor James Perkins Jr. to complete the process.
For example, the city needs to adopt a policies and procedures manual. The city financial department needs a software upgrade. The present software still operates in DOS, which is short for “Disk Operating System” and is a shorthand term for several closely related operating systems that dominated the IBM PC compatible market between 1981 and 1995, or until about 2000 if one includes the partially DOS-based Microsoft Windows versions Windows 95, 98, and Me.
The auditor pointed out that Microsoft recently announced the beta version of Windows 7, yet the finance department still uses the Windows 98 operating system, fully many years behind.
Although new software would be an expensive outlay of cash, “It would pay for itself very quickly,” said Charles W. Polmatier, a certified public accountant, and one of two representatives of Borland Benefield making the presentation at the work session.
City council members present: Corey Bowie, Susan Keith, Dr. Monica Newton, Angela Benjamin and Council President Dr. Geraldine Allen did not take a vote on the audit. They asked few questions and promised to submit other questions through Allen by e-mail for a response from the auditors.
However, auditors told the council if they wished to go for a bond issue in the city, now would be the time. The city has a 1999 bond account with revenues of $1.2 million. Debt service expenditures were $299,000, leaving a fund balance of $3.8 million.
Sheldon B. Webster, chairman of Borland Benefield, told the council, “You are fortunate to have a golden goose egg on the ‘99 bond issue. These are times of the lowest interest rates we’ll see in years.”
The bond money could be designated for any infrastructure projects.
At the end of fiscal year 2008, the city was sound financially with total assets of $43.6 million, total liabilities of $10.8 million and net assets of $32.8 million, auditors said.
Additionally, the auditors said the city should be commended for taking hard steps to ensure it stayed afloat, especially in light of an unprecedented recession that nobody has seen since the Great Depression.
Some of the drastic measures taken in this fiscal 2009 budget year included cutting many salaries by 12 percent, reducing work time, cutting back city hours and laying off some employees. Mayor George Evans and the council made the cutbacks shortly after taking office in November, about a month after the 2009 budget was adopted.
“This government should be commended for its swift and appropriate action and timely action,” Webster said.