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Audit report presented at June Minden City Council Meeting

by Will Phillips

During the June Minden City Council meeting, the council and mayor were presented the 2020/2021 audit for the city. Allen Green & Williamson LLP was the firm tasked with handling the audit for the city, and representing them were Tim Green, partner of the firm, and Jennie Henry, the audit manager for the firm.

The first point elaborated on by Allen was that of component units not being included in the report, the “units” in this case being the city marshall and city court. 

“If you ask the Governmental Accounting Standards Board… they want you to include everything in the report including any component units. There’s a couple of component units,  the city marshall and the city courts, that is not included as part of the report. So from GASB’s perspective, they’d like you to include that, and if you don’t include it they want you to issue an unfavorable opinion concerning what they like to see as the comprehensive report. So you sort of get a negative report as far as that,” said Allen. 

“However, of the part that is presented, which really is just the city itself, you have a clean opinion, unmodified opinion, and the report so states that.”  

Allen also went over the balances of the various funds for the city, starting with the general fund. “Your general fund has a $2 million fund balance in it. That’s kind of the equivalent of about a month and a half of reserves. That’s not bad. It could be maybe a little bit better than that, but a month and a half is not bad either. So you kinda had a good general fund balance,” said Allen. 

He then went on to mention that Minden has nearly a year in reserves for their sales tax funds and sewer sales tax funds. 

“You do have in the major two funds that are shown there — the sales tax fund and also the sewer sales tax funds — both of those you have almost a full twelve months or a whole year of fund balances in that. That would be very good in that regard,” said Allen. 

They mentioned that the city’s enterprise fund showed a twelve month fund balance as well. 

He then went into details about the city’s debt. “You had some debt. You had one debt that you paid off — bonded debt that you got paid off during the year — I think you spent 350,000 or so to pay that off, so you ended that year with no bonded debt,” said Allen. 

He went on to share some positive news, stating that the TIFF funds have been on the rise. “You had an increase in each one of those TIFF districts, and you got a couple ones — particularly District 2 — that has quite a bit in that, so those are doing good,” said Allen.

Allen also noted the increase in grant revenues that the city experienced as well as an increasing sales tax. 

“You did have a good bit more in grants and revenues. Capital grants and operating grants that you received. That was up at 1.6 million for the year. The other thing that was up a good bit was your sales tax, so even though the pandemic came along, your sales tax really increased,” said Allen. 

“$600,000 more in sales tax this year. Increase in power costs, that was the biggie you had for the year expense wise, and still was able to, for the enterprise fund, you still winded up with a good balance there.”

From Allen’s report, it would appear that, overall, the finances for the City of Minden are in a healthy spot. “Financially I think you’re doing good, and I would encourage you to keep it up,” said Allen. 

The next part of the report was presented by Henry, which was a single audit, which has less to do with the raw financials for the city and more to do with grading the bookkeeping itself. The single audit was required as the City had received over $750,000 in federal funds. 

“If an agency receives over $750,000 from federal funds for expenditures, then they have to have a single audit,” said Henry. “This year it was 2.1 million. Of the 2.1 million, 1.8 was the airport, so that was the program that had to be tested this year, and that was for capital improvement.”

She went on to detail the findings from the report, stating, “The bank accounts were not being reconciled in a timely manner. At the end they were all reconciled — but I think with changes in staff — and also journal entries were not reviewed. We didn’t find any problems when we tested the journal entries, just that they’re not being reviewed on a consistent basis. 

“Inventory was not being reconciled. Recreation officials were being paid at the beginning of the season, and we wanted a reconciliation of games that were rained out – Did they owe us money? Did you owe them money? – And to have that reconciled at the end of every season or month.”

The next point detailed was that of certain sums of money either not being transferred when they should’ve been or tracking the source of the funding itself. 

“There were basically two items with this. It was shown, and Cole Wise & Martin showed this before, there was 39,000 that should be transferred to the city. It wasn’t transferred in the prior year, and it wasn’t transferred this year. 

“53,000 of deposits, that they aren’t able to track that source of funding, of what individual that was. And I think that’s from the history, that it’s been so long. You’ve had computer changes, at one time it was kept manually. So we recommended that they get with the attorney to find out how to distribute this money,” said Henry. 

She did go on to say that the findings listed above were not new, and had been present in past audit reports for the city.

Later during the report, Councilman Michael Roy of District D asked City Attorney Michael Fluhr about the 39,000 that was supposed to be transferred and hadn’t, as well as the $53,00 they couldn’t fund the source for. 

“The 39,000 was transferred. The 53,000, I talked with the city attorney, and he said he would get in touch with the judge to figure out where the money and how the money is distributed. So I’m waiting on a response from Mr. Yocum,” said Fluhr.

“In reference to the $53,000, probably a decision needs to be made. The police department gets x amount, the city gets x amount, and the judge gets x amount. Because I don’t think either the judge, city attorney, or accounting department can specify who gets what. So I think that’s the status of that case.

“What happened with that money, no one could really say how it appeared, specifically in the amount of $53,000.”

Overall, it would appear that the finances for the city are in a healthy spot. Only time will tell whether the boons that Minden’s sales tax and TIFF district revenue have seen will continue or will fall back down to prior levels but, as a whole, it appears as though the city is staying afloat while keeping track of where the funds go and how they are used. 

The monthly Minden City Council meeting takes place on the first Monday of each month starting at 5:30 p.m. The meeting is open for the public to attend in person and, for those who can’t, it is streamed live on the city’s Facebook page and YouTube Channel titled, City of Minden – Feels Like Home.

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