Minor errors found in city audit

Area News

December 11, 2009

By Jim Young / jimyoungreporter@gmail.com The Crossville Chronicle Fri Dec 11, 2009, 12:00 PM CST

The Crossville City Council received their copies of the audit report for the 2008-'09 fiscal year that reported two minor findings from the auditors.

Crossville finance director Fred Houston discussed the report with council members during the audit committee meeting prior to the council's regular December meeting. The findings, listed as “material weakness,” include basis of accounting and infrastructure assets.

According to Houston, both problems stem from a mistakes in record keeping. In the first case, funds received within 60 days of the close of the fiscal year should have been set up as a receivable and then credited to the previous year. Instead, the funds were credited to the next year. Houston said it was his mistake and he will make sure a similar mistake will not happen again.

Crossville Mayor J. H. Graham, himself an accountant, said he felt that the particular incident was, “not a material weakness.”

The second issue stemmed from confusion over a developer's contribution to the city's infrastructure. When developers provide roads, right of ways and water/sewer lines to the city, they are recorded as assets. According to Houston, two identical assets that came in under different designations were both booked, creating a need for an audit adjustment.

In both cases, the city agreed with the finding and said that the auditor's recommendations will be implemented for future years.

Council members seemed pleased with the report and will continue to review the report for future acceptance and approval of the audit report by council action.

In addition to the audit report, the auditors prepared a letter and memo for the mayor and council with recommendations to strengthen the internal controls. These recommendations are not part of the audit but are suggestions to the city for improvements.

Some of those recommendations include continuing property records for water and sewer department, review of manual calculations by personnel in the finance department and implementing the new government accounting standards as soon as possible. The council is taking the recommendations under consideration.

The council approved a motion to approve a resolution authorizing a loan from the general fund to the water and sewer fund because of recent expenses under water and sewer that could create cash flow problems. Graham had brought the idea up at last month's meeting and after further investigation the matter was brought back before the council.

Graham cited the cost of repairs to Caryonah Dam, the Dooley Street sewer line improvement project and the Lake Tansi raw water project. Together those projects total well over $2 million. The loan will be set up as a line of credit and used if needed. Graham pointed out that even with the grants and loans used, they often require the city to pay out funds first and then get reimbursed.

The designers of this year's Crossville city Christmas cards were recognized at the council meeting. The grand prize winner was 13-year-old Daulton McCartney, an eighth grader from Pleasant Hill. Daulton earned $100 for his art and $200 for his art teacher's use. Daulton also received the artistic merit award of a $40 gift certificate from Mikki's Frame Shop.

Other winners received $50, including 14-year-old Jessica Young, a North Cumberland eighth grader; 17-year-old Sarah Damron, a CCHS junior; nine-year-old Kendall Cook, a Martin Elementary fourth grader; 12-year-old Brandi Marion, a Stone Elementary seventh grader; and 11-year-old Allie Kirkland a Pine View Elementary 6th grader.

Mayor Graham thanked all the students and teachers who participated in the contest. Every year the city sends out several hundred cards designed by students as invitations to the mayor and council's annual Christmas open house.

The annual Christmas open house will be held Tuesday, Dec. 15, at the Palace Theatre from 4 to 6 p.m. and is open to the public.

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