Audit reveals errors in City of Vidalia’s budgeting process
Published 12:14 am Tuesday, June 11, 2013
VIDALIA — An independent audit released Monday shows that the City of Vidalia overspent its budget in several areas, paid multiple invoices more than once and could not meet its customer utility deposit obligations in 2012.
The audit, which was conducted by Silas Simmons Certified Public Accountants of Natchez, was for the fiscal year ending June 30, 2012, and was dated March 15, 2013. It is the official audit on record with the Louisiana Legislative Auditor’s Office.
Mayor Hyram Copeland said the town would change the way it operates as a result of the audit.
“I wasn’t knowledgeable or involved nearly as much as I should have been,” Copeland said. “It does me no good to blame the previous city manager; he is long gone.”
One of the audit’s findings references “a lack of supervision and review by the town manager” which led to “various errors in the reconciliations of the bank accounts.”
Former City Manager Ken Walker left his job in September 2012. Copeland previously pointed to Walker as a responsible party in the city’s recent financial woes.
The audit showed the city’s general fund ended the fiscal year with a deficit of $708,521.
The report found that five funds were out of compliance with Louisiana law, which requires that expenditures not exceed the budget by 5 percent.
Those funds included:
• The Hydro Royalty Fund, which exceeded its $10 million budget by 15 percent. A total of $11,473,180 was spent.
Copeland said the fund’s largest expense is paying for daily operation of the city and utility costs. He said fluctuating river levels forced the city to overspend the fund.
In 2011, the Miss-Lou experienced record flooding on the Mississippi River. The following year, the region experienced extremely low river levels, which temporarily shut down the Sidney A. Murray Hydroelectric Station. The hydro plant typically spins off quarterly royalties to Vidalia, but had to defer payments during 2012.
• The Ambulance Fund exceeded its $477,500 budget by 27 percent. A total of $606,814 was spent.
• The Town Court Fund exceeded its $145,000 budget by 31 percent. A total of $190,657 was spent.
• The Roadway Improvement Fund exceeded its budget by 100 percent. No money was budgeted for the fund, but $1,096,536 was spent from it.
“We didn’t budget to fix the roads because we were worried that seepage water (from flooding) would prevent us from fixing roads,” he said.
A significant portion of the $1.1 million spent on improving roadways went to the city’s new recreation complex. Copeland said Vidalia spent $528,390 on parking lots and roads surrounding the complex. The rest fixed miscellaneous road problems in Vidalia.
• The Polk Park fund exceeded its budget by 100 percent. No money was budgeted for he fund, but $471,196 was spent from it.
“We didn’t anticipate that we would have to spend those funds,” he said. “I’m looking at this as a blessing in disguise. We have to learn from our mistakes.”
The audit also states that the city’s utility fund did not have enough money to cover customer deposits and was underfunded by $94,914.
Copeland said he was not aware of the shortage in utility deposits, but newly hired accountant Ashley Anderson explained the problem. She said the money for the deposits was placed in the wrong account.
“The money for the utility deposit was there, but not in the specific account for utility deposits,” she said. “It was coded incorrectly.”
The report likewise said that the auditors found “numerous” invoices that had been paid more than once, and recommended that the city review and revise its control system to ensure double payments do not continue.
In order to prevent future mistakes, Copeland said Vidalia hired Anderson and financial consultant Elizabeth Tanner to replace Walker and plan fiscal year 2014’s budget.
Copeland said Vidalia would no longer have a city manager.
Copeland and a team of city officials are in the midst of budget discussions to prevent future errors. He has also implemented several internal control measures.
“Everyone will have two sets of eyes, actually three — me, Ashley and City Clerk Vicki Byrnes,” Copeland said.
The city will also review each department’s budget monthly in order to find any mistakes, he said.