Back To Basics In Accounting For Lincoln

LINCOLN — The city of Lincoln has gone back to the basics with its accounting practices after the 2014 audit performed by Berry & Associates accounting firm in Little Rock found some posting errors, according to Mayor Rob Hulse.

Tuan Berry, certified public accountant, attended the Oct. 20 Lincoln City Council meeting to explain the audit and answer questions. Berry said the only problem the firm encountered was that some financial entries had not been posted to the correct fund.

“You couldn’t look at the balance sheet and make any kind of decision. It was a puzzle,” Berry said at the meeting.

However, he assured council members that no money is missing and fund accounts balanced after items were coded correctly.

Hulse told council members that city staff is working on its

accounting practices, adding, “I believe this year will be a better one.”

Last week, Hulse said the city has not had the same problem with past audits conducted by Berry & Associates. The city has an annual audit of its financial records. A separate audit is conducted annually for the water and sewer departments.

“For some reason, we got out on the accounting side,” Hulse said. “We feel we’ve definitely corrected a lot of those accounting practices. We’re streamlining it and (are) watching it on a regular basis. We went back to the basics of the process and are making sure we’re posting it correctly.”

He added the posting errors have been addressed.

“Everything zeroed out. There were no misappropriations. None by any means,” Hulse said.

Hulse said former City Clerk Barbara Barker, who retired July 3 after many years with the city, had the responsibility of posting entries. Any errors would have been made by her, Hulse said. She was supervised by former City Business Manager Chuck Wood, who was terminated by Hulse on April 10. Hulse said the reason for Wood’s termination was not related to the audit.

Hulse said he was made aware of the number of posting errors when he met with Berry in August about the final audit report.

He provided copies of the report to council members and asked Berry to attend a meeting to explain the audit. Hulse said a company representative could not attend the September City Council meeting, so the item was then put on the agenda for the October meeting.

“We want to be as transparent as possible,” Hulse said. “It’s very important that everyone involved knows what’s going on and that we’re taking care of our tax dollars according to the law.”

The 2014 audit includes a report on internal controls over financial reporting, compliance and other matters. The report states the General Fund had 10 posting errors that ranged in amounts from a low of $1,441 to a high of $997,795.

The Street Fund had seven posting errors that ranged in amounts from a low of $3,280 to a high of $227,782. The financial records for other funds had 11 posting errors that ranged from a low of $565 to a high of more than $1 million.

The effect of the errors, the audit report states, “constitutes a significant control deficiency in the process of preparing financial statements. City management should implement procedures to ensure financial records are properly posted.”

For 2015, financial records are being kept by finance manager Rhonda Hulse and City Clerk Belinda Beasley, Hulse said.

City Attorney Steven Parker, who attended the Oct. 20 council meeting, said he did not have any concerns about the finances of the city.

“My understanding of the issue is that it was just more laziness in details,” Parker said. “Everything balanced out.”

He noted that cities are required to keep several bank accounts. The General Fund, for example, has many different accounts in it.

“The money was there but money coming in and going out was not being labeled correctly where it needed to be,” Parker said.