Aragon audits show excess spending over years, lack of oversight
The City of Aragon has been in financial troubles in the past according to audits the city council voted to approve in past weeks and months, but they have dug themselves out of the hole in the past years and have maintained a positive bank balance.
Williamson and Co., who are preparing the numbers, showed that in years past the city was more than $200,000 below revenue collections at one time, but it has built back up the bank account since.
On the same night that Aragon municipal court clerk Lori Dunn was placed on administrative leave, the city council also approved their latest audit to come back from Williamson and Co., who have put together the numbers from 2009 through 2014. No audits have yet come back from FY 2015 or FY 2016 as the accounting firm continues to work on reconciling the numbers.
The audits, which were given back to the city from the company without an opinion on the numbers, also reported that during the years of 2009 through 2013, city management was failing to provide proper oversight of Aragon’s resources. The audits through those years included issues with segregation of duties, records retention, accounting oversight, capital asset records and payroll withholdings for taxes both on the federal and state level.
Starting with the 2009 budget, the city had originally put out numbers calling for $771,700 in revenue and expenditures, with an ending fund balance of $12,915.
What the accountants auditing the city’s numbers actually found were $ 705,293 in revenue and $747,305 in expenditures, with a resulting excess of $42,012 spent over what the city had money for during the first year of the released audits.
That resulted in the city having a negative fund balance of $18,692, compared the $12,915 they were supposed to have left. A variance of $31,606.
The problem only continued to grow.
In 2010, the audits had found that instead of being just $50 short in the budget for that year based on $716,750 in revenue and $716,800 in expenses, they instead had only taken in $664,945 in revenue and had $755,494 in expenses, some $109,241 over what the city had on hand to spend. That increased to a $90,500 variance, and increased the negative fund balance to $109,241.
The gap in revenue versus expenditures continued to grow from year to year, as the FY 2011 budget balanced in the original numbers of $692,950 in revenue and expenditures reported. The auditors found instead some $ 737,227 in revenue, but $866,023 in expenditures. Adding the previous year’s shortfall, the city budget now showed a negative balance of $210,137.
By FY 2012, Aragon began to work on the funding problems based on the audit numbers. Though they budgeted $724,450 in expenditures and revenue for the fiscal year they took in an more than $ 50,00 extra, and used the positive balance for the end of the year to pay of $55,678 off the negative fund balance ending that year just down by $154,459.
The budget continued to grow in revenue in FY 2013 and the recently approved audit for FY 2014, both adding payoffs of an additional $45,176 for 2013, and $13,529 to pay off the previous year’s expenses.
All told, according to the audit numbers, the city went over the fund balance by more than $210,000 based on the figures presented by Williamson and Co. between FY 2009 and FY 2014, the years those numbers are available. They expended more than $ 728,414 between those years as well, mainly in municipal court, culture and recreation, general government and the police and fire departments.
A majority of the fire department spending came to an end when the department closed in 2014.
The overspending is only part of the story with the numbers.
Auditors also included in their report several issues they had with city financial procedures, partic- ularly for every year so far released not having a solid segregation of duties.
The report read that only one person was handling the funds from FY 2009 through FY 2014, the former city clerk Lori Dunn.
Aragon already took the step of removing her from the position in past years, with former Mayor Ken Suffridge placing her instead in the position of Municipal Court Clerk for the City of Aragon.
City clerk Sandy Norman was hired for the role, and Aragon previously had Hal Kuhn as the city’s financial officer. He left the job in November 2016, and since the council approved a contract-based financial consultant Ricky Hartley to oversee the bookkeeping for Aragon.
Dunn remains on leave as the GBI continues their investigation into financial irregularities.
Aragon’s audits also included in the findings the accountant’s additional issues with the final figures due to the inability to “verify significant amounts of city transactions,” according to the annual reports and lack of capital assets controls.
Suffridge said the city had also previously handled all the payoffs for the city failing to make payroll contributions.
He said that both the Georgia Department of Revenue and the Internal Revenue Service were both paid back with interest before he left office in 2015.
Auditors also took issue with the lack of general accounting oversight as well in their reports, citing that bank balances weren’t reconciling from year to year.