The minutes for the 09/16/10 meeting of the Legislative Audit Advisory Council (LAAC) are available online.
Town of Jonesboro
Mr. Irwin said for the last two years the auditor has issued a disclaimer of opinion. The reason the auditor was unable to opine on the financial statements in Jonesboro because of numerous control and compliance problems, and the town did not maintain adequate records. Senator Murray asked if the Board of Alderman and the Mayor was aware of these issues. Ms. Irwin said they were not invited, but her staff went twice to the town to give them assistance.
Representative Kleckley said the council has the ability to withhold funds if they are not timely filing audits, but asked what can the council do if they do not correct their findings. Mr. Purpera said the council has the ability to determine whether an entity is compliant or noncompliant with the audit law. In the case of Jonesboro, the opinion was a disclaimer of opinion, which is that the town’s records do not permit the auditor to conduct an audit. The audit is designed for ensuring accountability within the town, but the records are such that the auditor cannot do the audit, only a report. Representative Kleckley asked if they can withhold funding. Mr. Purpera said the council can determine the town to be noncompliant, but it would then be the responsibility of the transmitting funds to the town to withhold the funding.
Vickie Stephens, Town Clerk for the Town of Jonesboro, explained that she was very ill prepared to replace the town clerk who left two years previously. She said they had engaged an accountant to correct their financials. She said they are moving to implement internal controls, and some things were changed over her suggestions, as well as creating rules and regulations for the employees. Melba Murphy Holland, Office Manager, had written most of the rules and given it to the Mayor for his approval. Senator Gautreaux suggested to Ms. Stephens also call the Municipal Association for assistance. Ms. Stephens stated there is a lot of conflict between the Mayor’s office and the Board of Alderman.
Mr. Purpera stated that his Advisory Services staff have visited the Town of Jonesboro and given them detailed instructions. Ms. Stephens said the accounts have not been reconciled, but has checked off items that cleared the bank, because it was not until their 2008 audit was done that she understood how to reconcile the bank statements. She stated they did not have audit adjustments prior, but now has the ability to do that, so expect it to fall into place.
Senator Nevers asked who overruled the changes and recommendations to deal with some of these issues. Ms. Stephens said the Mayor is her only supervisor, and she saw a lot of things not being done as she thought were done. Senator Nevers asked the Legislative Auditor what he would suggest the council to do. Mr. Purpera recommended to ask the Mayor and members of the Council to come to a meeting, as these are serious issues and do need to see they are moving forward.
Senator Nevers’ motion to subpoena the Mayor and invite the Board of Alderman to attend the next meeting passed with no objections. Senator Nevers asked if there are any indications that there could be activities that the Attorney General needs to look into, he suggested that he be brought into this matter. Senator Murray asked if the auditor’s office sends notification to the District Attorney or U.S. Attorney if there could be any findings with criminal activity. Ms. Irwin said they do, but sometimes it is difficult to discern such unless a forensic audit done. Ms. Irwin said it is difficult to tell if it is bad accounting and bad controls for the Town of Jonesboro. Senator Murray said that this would be put on the agenda for the next meeting and requested to see Ms. Stephens and Ms. Holland as well.
The the meeting also can be viewed online here.
LAAC – September 16, 2010