After a long and detailed audit for the 2008/2009 fiscal year, Hughson City Council members were presented with results and suggestions from auditors on Monday, who brought some not so pleasant news.
“The audit report this year was well done,” said Matt Beekman, Hughson council member. “It allowed me to get my hands around this organization and allowed me to see some internal deficiencies, unfortunately.”
There were 15 different suggestions and comments provided by the audit firm Macias Gini & O’Connell that found things that were either not recorded or improperly recorded.
One weakness found was that the city had not previously recorded capital assets up to $16.5 million. The auditors noted that during the year, Hughson used an outside firm to conduct an asset inventory with the firm finding several properties that have not been recorded before.
City staff responded to the auditors comments with: “the purpose of the inventory was to identify assets which were not previously reported. In staff’s estimation the project was a success in this regard. Staff agrees with auditor’s recommendations.”
Auditors also found $171,858 in liabilities that were not properly accrued in the current fiscal year and a settlement payment of $300,000 that was not properly accrued. They found a total of three receivables that were not properly accrued in the current fiscal year for a total of $121,484.
Staff’s response was “of the five liabilities which we failed to accrue, three were under unusual circumstances. The Finance department did have two missing accounts payables file folders. They did appear about six months later in the center of a pile of unrelated folders.”
After the auditors’ final results were presented, City of Hughson Finance Director Debbie Paul informed the council at their Sept. 13 meeting that she was not interested in working with them any longer.
“I didn’t want to have to stand up and explain to you in public why I made my decision,” she said at the Sept. 13 meeting.
Paul said the auditors were very difficult to work with and caused more work for her staff.
“It is disappointing our auditor didn’t receive a RFP (request for proposal) because they really looked at our finances and we can only benefit from that,” Beekman said on Sept. 13. “They at least deserve a chance to rebid.”
Despite Paul’s decision, council members were pleased with the auditors work and requested staff to send them a RFP in hopes of their return.
“While those reasons may be valid, I think the perception may be different and we should give them the opportunity and if we don’t choose them because of financial reasons then that is different,” said Jeramy Young, new Hughson council member who won Doug Humphreys seat in the recall election in August.
Young requested to add an agenda item for the next council meeting to discuss continuing a contract with their current audit firm Macias Gini & O’Connell.
Council members approved the audit as well as the 2009/2010 budget for this year.
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