The Saratoga Sun -

What's the plan?

Saratoga Town Council discusses audit findings, schedules workshop for August 13


August 12, 2020

*Editor's Note* An earlier version of this article listed the time of the workshop as 5 p.m. on August 13. In the days the following the meeting, the time was changed to 4:30 p.m. This article has been updated to reflect those changes.

The recently accepted Fiscal Year 2018/2019 was just one of many topics of discussion for the Saratoga Town Council during their August 4 meeting. 

With Councilmember Bob Keel in attendance, Councilmember Jon Nelson initiated discussion on how the governing body would move forward with recommendations from Carver Florek and James. The discussion ultimately led to the scheduling of a workshop to be held later this week.

As was reported previously (see “Audit accepted, questions remain” on page 1 of the July 29 Saratoga Sun), the governing body voted 3-0 to accept the audit completed by Carver Florek and James. Following the acceptance of the audit, Nelson asked both Mayor John Zeiger and Councilmember Judy Welton how the council would address the findings.

Both Zeiger and Welton replied that they wanted to wait until Keel could be in attendance to discuss plans on how to proceed. With Keel in attendance on August 4, Nelson brought up the audit findings for the second time. The three findings issued by Carver Florek and James centered around misstatement of cash, segregation of duties, and noncompliance and use of restricted funds (see “Auditors issue qualified opinion” on page 1 of the August 5 Saratoga Sun).

Additionally, the auditors prefaced the audit, by stating that the fund balances and cash statements “may be inaccurate at the fund level.”

“With Councilman Keel here, I would ask, as the mayor and as the liaison to town hall, Ms. Welton, if you guys have thoughts about how to proceed in addressing the audit findings,” said Nelson.

Welton responded that the Town of Saratoga was already making steps to address those findings, citing part of the Town’s engagement with James Childress to perform a monthly bank reconciliation. Another step that Welton believed would address the audit findings was to add modules to Caselle, the Town’s accounting software.

“That would take care of some of the recommendations in the audit,” said Welton. “Was there something, specifically, Jon?”

Nelson responded by bringing up the misstatement of cash and fund balances, saying, “I think that speaks to the $3.7 million deficit that I think we need to not walk past blindly, but address as a council and determine how it is that we’re going to address that problem.”

“The other finding was the misuse of the restricted funds and, so, what are we doing as a council to ensure that all of the restricted funds are being appropriated to the correct spot and that we’re not continuing to violate that statute,” Nelson said.

“I believe that that was one of the things that James was going to work with Caselle and Suzie (Cox) on because there was one step within the software that wasn’t being done that would handle that situation,” replied Welton. “I’m not sure if he has done that as yet with Caselle.”

In response to Nelson’s concerns about the finding relating to noncompliance and use of restricted funds, Zeiger read from the recommendation for that finding which read:

We acknowledge that the Town has made positive steps to remedy this condition by changing the classification of these fund balances to restricted and contracting with a qualified professional to assist the Town in correcting the noncompliant use of these funds. We recommend that those charged with governance continue to engage with contracted professionals to determine the amount of noncompliance use of these funds. We recommend that those charged with governance continue to engage with contracted professionals to determine the amount of noncompliance and repay the restricted funds to the specific funds from which they were borrowed.

“Right there tells me they acknowledge we’re working on it, so I’m good with it,” said Zeiger.

Nelson replied by asking if the plan was to continue to engage with Childress for the foreseeable future and “pay him whatever he bills per month and just continue to do our books for us?

“I mean, that’s a plan. I want to be clear on what the plan is, though,” said Nelson.

When asked by Welton what Nelson suggested in response to the findings from Carver Florke and James, the council member brought up contacting the State Department of Audit. Zeiger, in response, said he welcomed a state audit.

“We asked them to come and audit, they didn’t want to,” replied Welton.

“I believe you voted against requesting a state audit,” Nelson said.

As was reported previously (see “Going through the motions” on page 3 of the March 11 Saratoga Sun), Nelson had made a motion to contact the State Department of Audit. That motion failed by a vote of 2-3 with Nelson and Zeiger voting in favor. Following that motion, Cox had informed the council that she had been contacted by the State Department of Audit. The town clerk stated she had referred them to Carver Florek and James. Richard Cummings, auditing manager of the State’s public fund division, confirmed Cox’s statement to the Saratoga Sun following that meeting.

“I don’t feel comfortable that, just because we’ve got a paragraph in an audit that says that, ‘We acknowledge the Town has engaged a professional’, that the next fiscal year is just going to run on track,” said Nelson. “I think that there are procedural things that are discussed in detail in the audit, in more detail than what was just read, about segregation of duties. Judy, you spoke about whatever the step is being missed in the account process, what is that specifically? What are we going to do to ensure that that happens?”

Welton responded by stating that the Town of Saratoga should continue to engage with Childress to address the findings issued by Carver Florek and James. Legal counsel Tom Thompson stated that it was “a council problem to solve” and suggested the governing body hold a workshop to address the findings. It was requested by Keel that Welton contact Childress prior to the workshop to address Nelson’s concerns.

That workshop will be held at 4:30 p.m. on August 13 at Saratoga Town Hall.

The next regular meeting of the Saratoga Town Council will be at 7 p.m. on August 18 at Saratoga Town Hall.


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