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Audit: City has $1.6 million surplus

Published 12:09am Saturday, December 29, 2012

The city ended fiscal year 2012 with a surplus of about $1.6 million, auditors found.

There is no plan yet on what to do with the money, but Budget and Strategic Planning Director Anne Seward said it shows the city is on a good financial track and came very close to the estimates of revenues and expenditures made in the spring of 2011.

“When you do a budget … it’s always an estimate,” Seward said. “If you’re within five percent, you’re good.”

The surplus was slightly less than 1 percent, she added.

The audit document was presented at Dec. 19 City Council meeting by the auditors, Brown Edwards. The auditors expressed an “unqualified opinion” on the financial statements, which is positive.

“All indications from them were we are doing all the things we need to be able to move forward,” Seward said.

The auditors did, however, find some weaknesses and deficiencies and encounter some problems dealing with vacancies in the city’s financial departments and a new software program, according to the report.

“We encountered certain delays and difficulties during the audit, primarily as a result of turnover in the City’s Finance Department and a change in the City’s general ledger software,” reads a letter that accompanied the report. “The staff turnover led to significant additional audit effort and assistance provided to City staff to discern the accounting treatment of certain transactions. … In addition, the change in the general ledger software resulted in additional procedures to perform our variance analysis of the revenue and expenditure accounts.”

Seward acknowledged the finance department “has had a lot of turnover in the past five years” but added she is “very proud” of her staff’s efforts to help the auditors complete their jobs successfully.

The audit firm also reported what it called “a significant number” of adjustments that were necessary for the financial statements to be in compliance with accounting principles. They included improper accounting in a number of areas, including the city’s capital assets, accounts payable and landfill monitoring expenditures; the school division’s accrued leave and capital assets; and the Economic Development Authority’s valuation of land inventory and bond maintenance fees payable.

Seward said adjustments are common in the audit process and noted the number had been cut in half from last year.

The auditors recommended management develop policies and procedures to address the weaknesses, according to the report. They included closer involvement of the Finance Department in the affairs of other departments. The city concurred with the recommendations, according to the report.

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  • cedarboy1

    Guard it very carefully for a rainy day,spending it because you have it is not smart.THINK!,Once you spend it,it’s gone. LEAVE IT BE!, PLEASE!.

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    • mab1960

      Cedarboy1-A rainy day fund would be most wise…squirrel it away and mark it for contengency funding for our Fire/Police/EMS in case of a major disaster like the tornado that struck around Obici Hospital a few years back. This is just one suggestion.

      As one who is retired from Government service I am quite familar with how budget spend down plans work…if you don’t spend it all at the end of the year, you lose that amount for the next years budget. I always thought that was a poor way to do business, Government has to be better stewards of the taxpayers dollar. The mindset started to shift to this way of thinking a few years before I retired…fiscal responsibility. This has to be a “top down” approach to management, aggressively supported by our city officals- a commitment to spend the tax dollars wisely.

      But then again, these are standard business “rules of thumb”- Politics is a completely different animal.

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  • John Doe

    JHuxter whereas I normally don’t comment on post, I generally enjoy your post and agree with you. But why attack public saftey? Public Safety needs the support of the city and the citizens. Someone will always need help. Our public saftey, both police and fire,do more with less everyday,campared to other cities in the region. As for the CM and city government, I’d agree with almost anything you say about them being reckless with OUR money. I just don’t see the need to attack those that protect and serve “US”.

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    • jhuxster

      I’m not attacking public safety but foolish spending. There is a difference. The city spent 3/4 of a million dollars for a “command post” even the police chief could only justify with one event in five years. That’s foolish. Just because money is in the form of a grant of comes from the magic fairy through some government system doesn’t mean we should spend it. All tax dollars are money taken from hardworking citizens and should be spent wisely. Suffolk has a poor record of spending wisely.

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  • jhuxster

    Everyone knows this city government. The one thing you can count upon is that they will take this money and spend it on something foolish–like another three or four gazebos or who knows how about a mobile command post for the fire department and one for the city manager so they don’t have to sweat when things get tough?

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    • SANSR

      JHuxter, if you were able to allocate the surplus funds in what you believe would be the ‘best bang for the buck’ so to speak, how would you distribute the monies? Be specific; make informed determinations based on what you observe and how you interact as a citizen of the community. Do you spend it all? Do you shore up the rainy day fund? You seem quick to dismiss and denigrate how the current city government manages the funding. That is, of course, your right and no one can take that right from any of us, but please bring the discussion full circle and offer suggestions that have the potential of benevolence for all concerned. This is one more venue for the citizen to voice an opinion; opinions that are not lost on politicians. I hold onto a self satisfying belief that our elected officials do indeed follow these electronic venues and take from them one more facet of sampling the voice of the electorate. Do not shirk your duty as part of the electorate by voicing a concern without offering what you believe to be an appropriate solution. All things being equal, I feel better reading about a $1.6 million surplus than the opposite. Happy New Year everyone!

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      • jhuxster

        This city spends a HALF A BILLION dollars in a city of 84,000 people. That’s absurd. If you think they spend it wisely then I suggest you go back and read some of the comments made by our elected officials such as Councilman Brown who was incensed when the people suggested it was completely unreasonable to give senior city personnel huge wage increases in this economy. I’ve tried to get spending information from the city in the past and the only thing you get is everything is “working papers” and not releasable to the public. Drive around the city and you’ll see more than enough examples of fiscal waste to determine no one in city government spends responsibly. In truth if there is only a $1.6 million surplus then it means the citizens are being overtaxed. How about return the money to the people and start spending wisely.

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  • dollyb12

    I was going to offer my 2 dollars worth, but KNRMCO and thekytikat already expressed my sentiments. Aw, what the heck, I’m going to say it anyway: Really?? This doesn’t surprise me at all. This just proves how our city is mismanaged. If they want their raises or storm drainage fee increases, you can be sure the city will be looking to us for more money instead of adequately managing what they have already been given. Isn’t that why Suffolk cut ties with VDOT a few years ago?

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  • KNRMCO

    Not surprised….now they have the $$ to do things that THEY WANT TO DO.

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  • thekytikat

    Here’s an idea — Manage the city money better, so you can provide tax relief to the area, making it a better place to live & do business.

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