City Audits

The following is an excerp from the Minutes of the July City Council Meeting

2.  Audit  2008, 2009 and update from Legislative Audit

If we were able to complete our audits for the years of 2008, 2009, and 2010 by September 30, 201 the city of West Fork would no longer have to pay auditing fees. West Fork has a contract with Kennedy, Fulmer stating 2008 and 2009 audits would be completed by May 2012. Audits still not completed.

K. Drymon asked Council to consider staying with Kennedy, Fulmer.

Transcription of part of that meeting.

AUDITS DISCUSSION  July 10, 2012 City Council Meeting

FH-Frances Hime, KD -Kristie Drymon, TK-Tom Kielak   MC- Misty Caudle   XX- unidentified voice

FH:    Mr. Kennedy, who contracted with us to do 2008 – 09 said he thought he could do 2008 by the end of 2012 and do 2010 in one month. The Municipal League said that if we can get 08, 09 and 10 done by October 31 that they will put us on our schedule and that would end the expenses for auditing and our legislative audit would be free, there is no charge for that. In searching for firms, companies that did municipal audits and the following contacts, Bill and Barkley out of Fort Smith and said they could do the audits but did not want to give a quote, but they could come here and visit with the treasurer and look at our financial records before they give us a quote. They felt confident they could do it by Oct. 31 and another firm in Rogers BKD

XX: So the year in question is 2010. He has done 08 and 09

FH:  No he can get those done he thinks by September 1st but couldn’t do the final year. I told Bill and Barkley that and they said it wouldn’t be worth it for them to only do one year ( 2010).

So I asked if they could do 2010 but it wouldn’t be worth it because they have to set up the accounts and overhead.

They could complete by Oct. 31 but haven’t given quote for all three years. This is just an update. They will be here next week so I will try and firm that up unless the council has other questions

XX:  What is the contract we have?

FH:  It was to complete the audits for 2008 and 9 by May and there has been no work done. First of June,  I called and he had not done 08 and 09.

XX: Does he do some of that work here?

FH:  Yes but a lot is from the office. And I have been in touch with him and he is working.

XX:  Are we on a timeline?

FH:    If he is working on it then he has not communicated with me. I have called and sent letters because I have to report where we are in this process because the legislative audits asking for it

He can do 08 and 09 but he cannot do 10 in one month. It is beyond him.

XX:  Where is the legislative audit fit in this timeline?

They said if you do not have 08 and 10 done by the end of October then you go and wait til we do schools and that is another year

Before they could do all audits

FH:  You either as a city pay a private firm or the state will do it for you . When the state does it for you it’s a little slow but it can’t be any slower that what has been going on so far. We went down there [Little Rock]the state gave us a slap and we gave them a plan and it aint our fault,  it’s the auditors, they are behind and Kristi is in contact with him, it is going to be done. If you don’t give us 08, 09 and 10 we won’t put you on the calendar for 11 and 12 until next year. So we will be even farther behind.

TK: Bail Barkley and BKD will be expensive. Let him finish what he’s got and have the mayor keep trying to get on the calendar and agitate for as soon as we can. Great firms but you will pay for it

But you still have to pay for 10.

XX: He said he could get it done by the end of May and not he says the end of October. Can we believe this man? I mean

XX:  I don’t think we should attack

XX:  I’m not attacking his character as much as

FH:    This is an audit. This is your decision you are the council, you manage the money it’s your money the tax payer’s money that you manage. I have no stake in this.

XX:  Audit if they get upset about it you will know about it. They will not let it slide they will let you know as long as you are communicating with them and not ignoring it for ten years then you get in trouble but as long as you are making progress your ok

XX:  What’s the problem that the legislative audit puts us on the back burner?

XX:   guess they could say you’re not eligible for 11 if they go to 13 so then you’re paying for 11 again

They are not going to do 10

XX: So you keep lighting fires under Kennedy to audit then you may have to do 11 its doable at least if you get one more year you in the system then for getting free state audits

XX:  I’m going to request the consider no going to legislative audit. Yes we spend money on Kennedy to do our audits yes it’s a little slow but legislative audits are a little slow too, so I don’t think the speed of when the audits are done should be an issue as long as work is being considered and done

KD:    I’m not an accountant. I don’t have a degree. I’m comfortable with my job.  I come into questions all the time. I can pick up the phone and call Jim,[Kennedy, the auditor] if he’s not at work I call his cell. I’ve called him at home. He’s always very helpful to answer questions,  payroll tax questions or whatever, he is always very helpful. They also do two different types of audits. The legislative I believe forensic audit which basically looks for people are stealing money. Jim also does that, I’m not sure of the technically term but he also covers that and balance sheets and profit loss and that type of stuff also, so when I produce a report to you, you can be confident in the information. The legislative audit isn’t looking for that information so I don’t know, maybe I missed a vote in the past where yall have voted for a legislative audit

FH:   Yes we did vote.

KD:    I don’t recall that. Remember we talked about it but I don’t remember it getting voted on. Just ask that you consider to stay with Mr. Kennedy. It’s been a nightmare for him to catch up. He has had to re invent the wheel and for bringing in another company they are going to have to do the same. For them to say they could do it in a month without looking at it I don’t see how they could have the confidence to say that.

FH:    That’s why they want to come up here I can tell you I think it was March 2011 it was voted on it’s in the minutes.

KD:    When legislative audit had their question about us being so far behind so all I’m doing is giving you that information and trying to stay in communication with them.

FH:    Thank you Kristie.

From the audience:    If we are behind on our audits how does that affect us getting grants or bonds for things ya know we were 10 years behind and the state may be behind but if we need bond to connect our Fayetteville sewer or to get other bonds or grants for traffic. If we are not financially stable how that does affect us

We are looking at you

TK:    In my experience it all depends on whose money you are borrowing. If you are borrowing the states money they have a certain standard. Or a market depends on what market you have used Stephens crews mort n keegan will use different attorneys from different assurances and they have different regulations

So it may be great or it may be less.

TK:    If you are floating $130000 on open market they won’t begin . The standards are different for states

Why is the audit that far behind?

FH:    There is a book of minutes that go back for years that could give you that.

AL:    Cancer, death,  epsolence    The saga beings.

FH:    Any further discussion?

Thank you for the update.

A lot of phone calls and updates and will contact the legislative audit.

FH:    Any motion?

Motion to continue with Mr. Kennedy for our audits.

FH:  Forever?

XX:  Well until it changes.

FH:  We are saying 08, 09 and 10

I don’t think we need to make a motion

Well,  Kennedy’s contract is up?

FH:    It’s not for a time it’s for an amount of work.

So we don’t need a motion.

The mayor continues to contact with legislature and if that gets critical she comes to us.

So we are continuing?

MC:    Keep the fire lit under him.

I can’t do that

Kristie

FH:  You ask somebody else and hold that to them

FH:  She wants the fire held under Mr. Kennedy

MC:  You know just to get them done as quickly as possible.

There was a phone call with him….he is working on it.

FH:    And I hope he will because he said when I spoke with him that he has other clients. And I mentioned the agenda and he has not completed 08 and 09 as promised by May with no explanation and no contact for that year.

So I’m offended

But if he quits on us …

At the last council meeting the members expressed concern

Zephyr’s Financial Expert

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