NATCHEZ — The City of Natchez will likely receive poor marks on its audit report, marks city leaders attribute to bad bookkeeping and problems with new accounting software, among other things.

But major penalties shouldn’t be put on the city or any grant funding in the works if the proper steps are being taken to correct those measures, Natchez Mayor Butch Brown said.

“We’re not talking about any penalties, jail time or anything like that,” Brown said. “It’s not like (granting agencies) have sent us a bunch of money, and we’ve misspent it.

“They don’t get all excited because you have a bad audit if they know you’re trying to fix it.”

Brown’s comments came Monday afternoon during a work session during which Deanne Tanksley with the Gillon Group, who worked on the city’s audit, gave an update to members of the Board of Aldermen.

“We continue to work through a multitude of issues,” Tanksley said. “I’m looking at probably the first time in my career issuing an adverse opinion.”

Tanksley said she and members of the Gillon Group were having issues reconciling accounts in the general fund, where roughly $150,000 of revenues and transfers weren’t reported.

Those issues stemmed from the two previous city accountants not having adequate knowledge of governmental accounting.

“They sought no guidance,” Tanksley said. “They just have made a mess of things.

“They did not leave any track or trail you could follow.”

Brown asked Tanksley if when filing the adverse report the language could be worded to include specific reasons as to why the city has run into those issues. The mayor cited the death of Gary Valentine, the city’s data processor, problems with new accounting software, Springbrook, and other things that led to a difficulty of getting the city’s finances in order.

Tanksley said the city would have a chance to respond to the adverse report, in which they could state the reasons why the errors occurred and what city leaders are doing to correct those issues.

Those improvements, which include the hiring of new accountants, are something Tanksley said she believes will help the city greatly.

“I do have a lot of faith in the ladies down there now,” Tanksley said. “They call me when they have questions and listen when I have answers for them.

“That gives me a lot of hope.”

Alderwoman Sarah Carter Smith said she was discouraged with the situation the city always finds itself in with its finances and wondered what could be done to offer a more permanent fix to the problem.

“We’ve been told we’re doing the right thing, that we’re making progress and everything is OK, but when can we reasonably expect to have a handle on our finances?” Smiths aid. “Are there more outside resources we can get to make this go faster?”

Discussions of more training for the accountants in place or the possibility of contracting out the entire city clerk’s office were brought up briefly before conversations shifted back to when the audit would be complete.

Tanksley said she would attempt to have the audit complete by the first meeting in November, per the request of Alderman Dan Dillard.

The discussions of the city’s finances then switched gears from the audit to a tax anticipation loan City Clerk Donnie Holloway said he planned to ask the board to approve during today’s monthly meeting.

Holloway said $600,000 of the loan would be used to meet payroll, while $200,000 would be used to pay back an interfund loan from a community development fund comprised of funds given to the city as part of its lease agreement with Magnolia Bluffs Casino.

Alderwoman Joyce Arceneaux-Mathis asked Holloway why the city couldn’t wait until December to pay back that fund when another wave of payments from the casino is expected to come through.

The casino agreed to pay $1 million in annual rent for a city-owned waterfront location on Roth Hill.

“That way, we’re paying ourselves back,” Arceneaux-Mathis said. “And it means you’re not borrowing it, you just use part of the lease money.”

Dillard said he still wanted to see tighter restrictions on funds received from the casino to ensure they don’t get transferred in and out of the account for other purposes.

Board members tentatively agreed they would approve today a $600,000 tax anticipation loan to meet payroll.

But Alderman Mark Fortenbery ended the discussions of the loan saying he wants to see the board take a closer look at salaries across all departments.

“I think we need to look at payroll and make some big changes,” Fortenbery said. “We need some layoffs or something because I look on our payroll and see an assistant to a main person in charge making more money.

“Something needs to change.”

Board members agreed city salaries were something they needed to address at a later date.