Town receives ‘clean’ audit, three findings noted
By Kristen Swing
“Overall, the audit went very well. It’s a good testament to everyone’s efforts here,” Kevin Peters, of Blackburn, Childers and Steagall, reported at the Board of Mayor and Aldermen meeting on Jan. 14. “I think in the last several years we’ve seen a lot of improvement in the town’s financial health.”
Peters also credited the town with having good financial management as he explained that the audit opinion received by the town is “the best a client can get.”
The town’s General Fund balance received a $2,000 bump over the fiscal year to put it at approximately $961,000. The town’s Water/Sewer Fund saw a huge jump — from $432,000 to $810,000 — in its cash balance, something leaders called an “excellent improvement.”
The town’s Solid Waste Fund decreased from $47,000 to $31,000, a drop credited to the purchase of a lot of equipment last year.
Three findings were reported in the audit, two of which carried over from the previous year.
The new one, related to the purchasing of used equipment, has already been addressed. It was fixed by the BMA last month through an amendment to the town’s purchasing policy.
The two findings that have carried over include one about the town’s water loss exceeding the state-required 35 percent.
During fiscal year 2012, the town reported a water loss of 55.6 percent. The State Comptroller’s office began auditing water loss approximately two years ago.
“Our number has improved since then. It’s coming down and will continue to come down,” Mayor Kelly Wolfe said. “When the rules change and it is said that instantly you have to be in compliance, I’m not sure I buy into it being a deficiency.”
Peters noted that the water loss has been a statewide issue.
“The important thing is that you have a plan to address it,” he added.
The other finding carried over from the previous fiscal year deals with an unfinalized agreement between the town and Lowe’s.
When Lowe’s decided to open in Jonesborough, town leaders agreed to fund a water line extension to Headtown Road. The town has paid Lowe’s annually for the project.
However, there remains no written agreement on the total amount the town is to pay Lowe’s, something auditors say is bad practice.
Auditors urged the town to obtain a final resolution and agreement regarding the pay back terms and a stated agreement price.
Browning said the town is paying Lowe’s an annual payment based on the original cost estimate for the project.
What is owed, however, is actually much higher than what was initially projected, Browning said.
The agreement with Lowe’s has a balloon payment at the end of a 10-year period, meaning the town will have to pay off whatever remains at that time rather than continuing with annual payments.
Browning said he will confirm the amount owed to Lowe’s by the end of the current fiscal year. At that time, the town will determine whether annual payments will be increased or if the town will finance the remaining balloon payment at the end of the 10-year timeframe.