TOP STORY > >Officials find funds missing in Beebe audit
Leader staff writer
Missing money in the police drug-buy fund, unprepared budgets for special revenue funds and temporary checks not properly numbered were some of the problems uncovered in a state audit of Beebe’s 2006 city financial statements.
The nearly $5,000 in missing money is the subject of a state police investigation.
Jacksonville, on the other hand, received the highest ratings possible from the auditors of its 2006 financial statements and received an award for the 10th year in a row for its outstanding financial reporting.
State auditors found problems with Cabot’s financial statements, while Jacksonville and Sherwood passed without concerns.
A letter prepared by deputy legislative auditorJune Barron states that accounting records for the police drug-buy fund, maintained as a “cash” fund, indicated a balance of $3,292, but no cash was on hand.
Another $652 identified as seized by the Beebe Police Department was not on hand. Also a $150 rebate check, payable to the Beebe Police Department, was cashed by then Police Chief Don Inns, but not remitted to the city for deposit.
The letter states, “These missing funds, totaling $4,727 during the period January 1, 2006 through August 7, 2007, are under investigation by the Arkansas State Police.”
According to the auditors, “lack of management oversight involving cash transactions contributed to these unaccounted funds. We recommend management monitor cash transactions on a periodic basis.”
In the mayor’s office, the auditors said that the mayor did not prepare a budget for certain special revenue funds, including intoxi-meter, fire protection, radio equipment repair and replacement, drug control and court automation as required by state law.
Auditors also cited the clerk/treasurer’s office for issuing 59 temporary checks valued at a total of $47,715 that were not prenumbered as required by state law. Auditors also said that fixed assets records were not updated for the current year.
In another letter released by the legislative joint auditing committee, auditor Roger Norman said the city’s financial statements “do not present fairly…the financial position of the City of Beebe…or the changes in its financial position…or its cash flows.”
The auditors also said Beebe’s water and sewer fund statements did not disclose “all the required information concerning deposit risks.” The omissions, in the opinion of the auditors, are why the financial statements do not present a fair and proper picture of Beebe’s finances.
The auditors believe there was a deficiency in the city’s internal control of fund management.
A control deficiency exists, according to the audit, when the design or operations of a control does not allow management or employees to prevent or detect misstatements in a timely fashion.
Auditors said that to ensure the proper safeguarding of assets, financial accounting duties relating to initiating, receipting, depositing, disbursing and recording cash transactions should be distributed among appropriate employees. Auditors felt this was not being done in Beebe.
In an audit of Cabot’s 2006 financial statements, auditors found noncompliance with state law and accepted accounting practices in the office of the clerk/treasurer.
According to Barron, five items that were considered capitol expenditures were not listed on the city’s inventory record, and four items on the city’s fixed asset records had been sold, but were still on the city’s inventory list.
Auditors also found errors or omissions in the city’s financial records.
According to the letter issued by Barron, when the city converted to a new accounting system in July 2006, the beginning general fund account balances under the new system was different then the ending balances under the old system. “These differences in the financial records were not reconciled,” wrote Barron.
Also cash and investments in the amounts of $82,112 and $205,863, along with receipts and disbursements of $301,699 and $278,064 were not recorded “due to a failure of the city to record investment and loan activity.”
The city’s aggregate financials contained what Barron called “misstatements for receipts and disbursements in the amount of $220,807 and $2,164,236 due to the city not recording receipt and disbursement activity in the debt service construction funds.”
“Misstatements” for cash and investments in the amounts of $19,528 and $30,379 were discovered “primarily due to the lack of record-keeping for investments.”
Barron called these findings “a significant control deficiency in the process of preparing financialrecords.