City audit reports brings good, bad news

Published 7:09 pm Friday, October 1, 2021

NATCHEZ — City of Natchez elected officials heard Tuesday night the audit report from its last fiscal year ending Sept. 30, 2020, and the news was good, tempered with some not-unexpected accounting procedure findings.

The audit gets the city caught up on past-due audits, having completed three in the last calendar year, thus ending a nightmarish disarray of the city clerk’s office   could have cost the city millions of dollars in state and federal funding.

Prior to Natchez Mayor Dan Gibson, former Mayor Darryl Grennell inherited a city clerk’s office that was behind on bank account not reconciled and audits incomplete, the result of several different staffing changes beginning in about 2010.

In October 2020, Grennell hired Servia Fortenberry as city clerk.

At Tuesday night’s meeting, the aldermen and Gibson praised the work of Fortenberry, whom they credit with providing the leadership needed to get the city’s financial books in order.

Carr Hammond, CPA, a partner with the accounting firm Silas Simmons of Natchez, said the audit of FYE 2020 is due on Sept. 30.

“This is the first time in quite a long time” that a City of Natchez audit has been completed on time, he said.

Hammond said the audit of the current fiscal year, which ends on Sept. 30, must be completed by June 30, 2022, earlier than usual because of federal funding involved.

He thanked City Clerk Servia Fortenberry and her staff for getting the three audits completed. However, Hammond said the audit includes several “findings” the city needs to improve upon with its internal controls required to meet government accounting standards.

Those include:

  • Bank reconciliations, which should be completed accurately and in a timely manner.

“It’s significantly better this year, but this is a basic, fundamental control and it should be tied down on a monthly basis,” Hammond said. “Staying caught up with that is critical.”

Mayor Dan Gibson and aldermen discussed meeting with Fortenberry to determine if her staffing is at the level it should be to complete its job monthly, or if perhaps some jobs could be outsourced.

  • Accounting records, such as the recording of transactions, not being recorded in a timely manner. Hammond said processes have improved but issues still remain.
  • Lack of proper approval for interfund transfers. He said when one fund is low on cash and that cash is needed quickly, a loan of sorts is taken from another fund that may have excess cash at that point in time. These maybe weren’t approved properly,” he said. “That’s a continuing problem.”
  • A lack of separation of duties within the clerk’s office. Hammond said the problem is a common one for smaller government entities with limited staffing. Different employees should be responsible for signing checks, approving invoices for payment and reconciliation of bank accounts.

Gibson and aldermen praised the work of Fortenberry, her staff and consultant Wallace Collins, who helped with the three audits completed this year.

Gibson pointed out the city finished the fiscal year ending 2020 in the black, and expects to finish the current fiscal year with a surplus of about $925,000.