Fairfield Ledger

Mt. Pleasant News   Wash Journal
Neighbors Growing Together | Mar 24, 2018

State releases Fairfield audit

City administrator says only minor problems found
By Andy Hallman, Ledger news editor | Mar 07, 2018

The State Auditor Mary Mosiman released her office’s annual audit of the city of Fairfield.

The audit is 77 pages long, and reviews in great detail the city’s finances between July 1, 2016, and June 30, 2017. The final 11 pages are dedicated to suggested changes in how the city disburses money and how it accounts for the disbursement.

Fairfield’s city administrator Aaron Kooiker and its city clerk Rebekah Loper were not in their current roles at the time of the audit was being compiled. Loper worked at city hall, but Joy Messer was still city clerk. Kooiker was working as the city administrator for the town of Hull until he began working for Fairfield in November of last year.

Kooiker said there was nothing alarming in the city’s audit.

“It looks pretty typical of an audit,” he said.

The audit identified several ways the city could improve procedures. For instance, it recommended segregating duties among city staff and increasing oversight.

“I’d guess every city gets that comment on their audit,” Kooiker said. “We do the best we can with the level of staffing we have.”

Kooiker said the audit is a tool to help the city do a better job and is not a “slap on the wrist.” He said many of the problems mentioned in the audit have already been corrected.

“In general, the city has been run very well,” he said.

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The following is a list of suggestions included in the audit, and how the city responded to them:

• The city has a limited number of employees, and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight. For instance, the audit notes that one or two individuals have control over all steps relating to utility receipts such as opening the mail, billing, collecting, daily balancing and maintaining detailed accounts receivable records. The audit suggests using elected officials to provide additional oversight.

The city wrote that it would continue its efforts to segregate the duties the audit mentioned, using available staff and elected officials.

• Amounts held by the employee health plan were not properly recorded in the city’s financial statements. The lack of policies and procedures resulted in city employees not detecting the errors in the normal course of performing their assigned functions.

The city wrote that it would review employee health plan reports to resolve any potential inaccuracies.

• Utility billings, collections and delinquent accounts were not reconciled throughout the year, and a delinquent accounts listing was not prepared. Utility collections were not reconciled to deposits. Shut-off policies were not strictly enforced and delinquent accounts written off were not approved by the city council.

The city responded by noting it has established procedures regarding delinquent accounts, but would confirm with the city council the current policies in place.

• The city’s credit cards are not kept in a secure location, and one of the 10 transactions tested did not have itemized receipts available to support the charges. The lack of procedures can result in unauthorized and unsupported transactions and the opportunity for misappropriations errors.

The city wrote that it has implemented a policy to require an itemized receipt for all charges, and will make an effort to ensure the policies are met.

• The city does not update user profiles periodically, and former employees continue to have access rights to the system. Management has not adhered to password requirements or required offsite storage of system backups.

The city wrote that it would contact its information technology company to update user profiles and aid in storing system backups offsite.

• Disbursements during fiscal year 2017 exceeded the budgeted amount in the park and recreation, and capital projects funds. The audit states that the budget should have been amended before disbursements were issued.

The city wrote it would make every effort to amend the budget before disbursements are made.

• The audit lists three expenses that it does not believe meet the requirements of a “public purpose” since the supposed public purpose was not documented. The three expenses were: $654 for catering for a city employee appreciation lunch; $250 in chamber bucks as a retirement gift; and $36 for a retirement plaque.

The city responded by writing that its employee appreciation celebration is paid from local option sales tax allocated for any lawful purpose and was approved by the city council. The council has adopted written policies for employee recognition.

The audit wrote that the city must still document a public purpose served by its employee recognition disbursements and appreciation lunches prior to disbursing money for them.

• The city paid $25,832 to Mark Brown to trim and remove trees. In addition to owning a tree service, Brown is an employee of the Fairfield Fire Department. The audit notes that, though the city obtained competitive bids for the service, it was unable to determine if the rates paid agreed with the bid since the invoices from Brown Tree Service were not itemized.

The city wrote that it would request the business submit itemized invoices showing the rate for services.

• Although minutes of city council proceedings were published, they were not always published within 15 days, and the publications did not include a summary of receipts as required by Chapter 372.13(6) of the Code of Iowa.

The city wrote that it would be more diligent in publishing the minutes in accordance with state law.

• As of June 30, 2017, the city had a deficit fund balance of $435,320 in the capital projects fund.

The city responded by writing that declared private donations will eliminate this deficit.

• The Annual Urban Renewal Report was not approved by the city council. The amount reported as TIF debt outstanding was understated by $456,950, in part by not including the Pilot Grove and City Recreation Center obligations.

The city will make an attempt to complete the AURR correctly and acquire city council approval.

• The city over-collected taxes for Wagon Wheel and West Jackson Urban Renewal Areas, which were fully paid but showed balances of about $84,000 and $16,000, respectively. The auditor recommends consulting with an attorney and perhaps returning the money to the county treasurer, who will allocate it to the respective taxing bodies.

The city will work with legal counsel to determine the best use of the balances in the two funds.





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