By Frank Lewis
September 24, 2013
PDT Staff Writer
The city of Portsmouth has continued to get “dinged” by the Auditor of State’s office in the latest audit of the city. One of the highest profile items was the way the city pays bills. According to the audit, the City Auditor did not close out the accounting system for 2012 until Feb. 22, 2013.
The City Auditor was paying bills due in 2012 in 2013. Approximately 245 checks were dated Dec. 31, 2012, but were written in calendar year 2013. The total of the checks that were dated Dec. 31, 2012, but were issued in 2013 was $187,205. The City Auditor was backdating the dates on the checks to make it seem like they were actually paid in 2012 but they were actually written in January and February of 2013. The checks were not clearing the bank until January and February of 2013. The Auditor of State’s office said that action resulted in an understatement of payables on the financial statements. In addition, he said it also creates the possibility for expenditures to be inflated for any grant that would end in December.
“When checks are written after year end, but posted in that year, the expenditures reported as grant expenditures on any type of expenditure report could be overstated and could cause noncompliance with period of availability compliance requirements,” the audit said.
The report recommends the City Auditor close out the accounting system in January following the fiscal year end, and that the City Auditor not back date the dates on the checks written in January and February to the bills that were due back in December.
“We further recommend that the City Auditor date checks in the system on the actual date they are paid. Thus, ensuring all expenditures posted to the system properly reflect the date expenditures were truly made,” the report noted.
The state said the city did not have a formal process for reviewing the Auditor of State’s unresolved finding for recovery database nor could the City provide evidence that a search was completed for the contracts that were entered into. This could result in the city entering into contracts with individuals or companies that have unresolved findings for recovery against them.
The state recommended the city develop a formal process or procedure for viewing the finding for recovery database at www.ohioauditor.gov for each vendor with which the City enters into a contract. The result of the search should be printed and maintained on file with the contract documentation.
Ohio Revised Code Section 5705.41(B) prohibits a subdivision or taxing unit from making any expenditure of money unless it has been appropriated as provided in such chapter. The Auditor of State’s office says the city of Portsmouth’s budgetary expenditures exceeded appropriations at the legal level of control at Dec. 31, 2012 on multiple items. For example, in the Police Department pensions fund, the city appropriated $407,570, but the total expenditure came to $457,927 for an unexpended balance of $50,357. Under the Fire Department personal service fund 101,223.5111, appropriations were for $226,335. However, expenditures came to $281,932, for an unexpended balance of $55,597. Under the title “Electricity for Street Lighting,” the appropriation was $215,000. However, the total expenditures for that service were $257,505 for an unexpended balance of $42,505.
The Auditor dinged the city on several other budgetary issues including equipment depreciation. The city’s Capital Asset Listing included capital assets which were fully depreciated and thus, had no book value. The listing included 43 police cruisers with a total value of $918,918 and acquisition dates ranging from 1997 through 2006. In addition, the listing included seven fire trucks with a total value of $710,542 and acquisition dates ranging from 1950 through 1993. It was not considered cost beneficial to calculate the total amount of fully depreciated assets as of Dec. 31, 2012.
The Auditor also raised the issue on the lack of procedure regarding Public Information Requests, as noted in a previous article in the Daily Times.
“We noted the City’s policy did not state an employee or department responsible for public records request or a method to track public records requests received by date and the fulfillment of each request,” the Auditor said. “We did note during testing that the City’s departments have developed various ways of tracking requests. For example, the City Auditor maintains all requests and responses in a folder within his e-mail for tracking purposes. However, there is no consistency across the departments for how requests should be tracked due to the fact the policy does not outline any specific guidance.”
The report said in order to ensure compliance with Ohio Sunshine Laws, the City’s public records policy should include components such as having an employee or department responsible for public records requests; A method to track public records requests received by date and the fulfillment of each request; A policy regarding determination of records or portions of records which are not considered “public” that would be subject to redaction/withholding; A policy regarding the length of time and method that specific types of records are maintained and the method of providing requested records (e-mail, paper copies, etc.) and the cost charged to provide the record, if applicable.
The complete audit and subsequent responses and reports are available on the Ohio Auditor of State’s website www.auditor.state.oh.us.
Frank Lewis may be reached at 740-353-3101, ext. 252, or at firstname.lastname@example.org. For breaking news, follow Frank on Twitter @FrankLewisPDT