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LCDA audit shows fair statements

Timeliness cited as an issue by auditor

POSTED: February 29, 2012 9:22 a.m.

Despite a finding that information was not provided in a timely manner, auditor Christopher Lightle said Monday that the Liberty County Development Authority’s fiscal-year 2011 statements were “totally correct and fairly stated.”

Lightle, a partner of Karp, Ronning & Tindol accounting firm, presented an audit summary to the authority board during a meeting that spanned 3 1/2 half hours.

Board member Robert Stokes asked Lightle where the entity stands in terms of net position.

“I don’t have a crystal ball, but you’re not in the best position — you have some challenges ahead of you …,” Lightle said. “From an entity-wide standpoint, you’re not in that bad shape — like I said, you have some challenges. You have some heavy interest payments on debt coming up that are going to present challenges.”

The audit lists the following financial highlights for the authority:

• assets exceeded liabilities at fiscal-year end by $28,126,150

• total net position increased by $1,929,918

• government funds reported ending fund balances of $1,229,307, down $2,486,935 from the prior year

• total debt decreased by $3,029,828 in fiscal year 2011

Lightle said his only finding was that the financial report was not prepared within a timely manner, as the fiscal year ran from July 1, 2010 to June 30, 2011. The timeliness issue is a “deficiency in internal control over financial reporting,” Lightle’s report said.

“Demands placed on the individual responsible for the authority’s financial reporting responsibilities appear to contribute to the delays in obtaining timely financial information,” the report said.

The LCDA management’s written response was that they concur with Lightle’s observation. They proposed outsourcing  of financial statements preparation to a third party and scaling back the finance-related responsibilities of director of finance and administration, Carmen Cole.

Initially, staff thought they would be able to complete the audit before October; however, many obstacles with the software and accounting changes stalled the report’s completion.

Shortly before Lightle presented the audit, LCDA CEO Ron Tolley requested permission to create a request for qualifications and proposals for outside firms to prepare financial statements.

Tolley explained that Cole converted to a different accounting system during the fiscal year, and the city of Hinesville spent four years making the same conversion. He added that Cole has put in many 60-hour workweeks since her financial assistant departed last summer.

“(The financial assistant) was unexpectedly lost at the start of the fiscal year, and was not replaced due to a desire to secure budget savings as well as time issues regarding training a new person for the position,” Tolley said.

“Who’s going to pay for this?” board member Paul Krebs asked. “Where are we going to cut expenses to justify this expense?”

Tolley said the move would save money by eliminating the assistant position, which had a maximum salary of $38,000. In comparison, he estimated that an accounting firm’s services would run $20,000-$25,000 per year.

“We need to make sure that our financials are properly prepared and on time,” member John McIver said. “I’m for the proposals going out.”

McIver requested that board member and secretary Brian Smith draft a scope of work and clarified that until they receive proposals and quotations, the $20,000-$25,000 figure only is an estimate. Then he made the motion to approve Tolley’s request. Board member Robert Stokes seconded the motion.

“I admit, something needs to be done, drastically,” Krebs said. “But I am worried about the taxpayer dollars — I mean, where are we going to start cutting expenses, instead of adding expenses?”

The motion carried, with Krebs abstaining. Members Jim Thomas and Rep. Al Williams, D-Midway, were not present.

Other items on the meeting agenda included hardwood harvesting plans, a request from Liberty Regional Medical Center and lease agreements with the Liberty County Chamber of Commerce and CTech Metal Finishing. Look for more information on these items in Friday’s Courier.

 

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