GRANITE FALLS — Bookkeeping in this city was such a mess in 2008 that state investigators can’t say just how bad.
That’s because so much documentation is missing, according to a new state audit.
The report, released this week, is the latest installment of the state auditor’s blistering examination of the city’s policies, procedures and finances in 2007 and 2008.
Much like the auditor’s report on the city’s bookkeeping from 2007, released last summer, the report card for 2008 found several violations of state law and accepted accounting practices.
City officials say the 2007-08 audit spanned a period in which the city experienced high staff turnover and was operating with an interim city clerk. The city hired a new clerk, a treasurer and a public works director last year and has tightened up the procedures, officials say.
The violations carry no penalty but are intended to help jurisdictions be more accountable to the public, according to Mindy Chambers, a spokeswoman for the auditor’s office.
Among the violations cited in the latest report:
The city was unable to provide documents to support revenue and expenditures reported on its financial statements. Last summer’s report on the city’s 2007 finances made a similar finding.
An independent review of the financial statements was not completed to ensure they were accurate, complete and adequately supported.
State investigators determined that the city’s calculations were way off, compared with bank statements: $299,446 off the mark on revenue; $440,811 out of whack on expenditures. In the end, the city’s had $114,765 less in the bank than it thought, according to the report.
State law requires government agencies to retain records for at least six years, according to the auditor.
“Because the city did not follow these requirements, we were unable to give an opinion on the city’s financial statements,” the auditor’s office said.
Mayor Haroon Saleem, who took office earlier this month, said a former employee told him many key records were thrown out.
“Yes, there was some turnover, but that did not excuse throwing the records away,” Saleem said. “Our staff has been instructed that I do not want any paper or anything thrown away before I say OK.”
The violations occurred under former Mayor Lyle Romack. They became an issue in last fall’s election. Romack was soundly defeated.
Romack did not return a phone call seeking comment.
Last year’s auditor’s report found that Romack and his wife were paid $2,600 in mileage reimbursements. It said many of Romack’s mileage vouchers were not itemized and noted that more than $500 went to Romack’s wife to run errands for the city.
Last year’s audit cited 15 violations of accepted policies and procedures in the areas of reimbursements, travel, financial accounting, utility billing and bid law.
City Councilman Tom FitzGerald said he is confident the situation that led to problems has been straightened out.
“I have complete trust in the staff that we have now, and that with the system of checks and balances and the backup resources we have available now, that the smallest things won’t be an issue again,” he said.
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