Danville's finance department called 'a rudderless ship'

March 03, 2004|LIZ MAPLES

Danville's financial statements were riddled with errors after it spent months without a bookkeeper, a finance director who wasn't qualified and no city manager, according to its auditor.

Commissioners pointed fingers at each other and city staff Tuesday in a meeting with auditor Craig Butler, who called the city's finance department "a rudderless ship."

Among the audit's findings were:

* Millions of dollars in transactions that were never posted.

* $330,000 in deposits never recorded.

* Purchase orders mocked up after items were bought, and in some cases never signed or signed and approved by the same person.

* The auditor observed a "substantial" amount of cash left in plain view and unattended on city hall's front counter.

However, Butler said, no money was missing, and the city is still in good financial shape, so the situation wasn't as bad as it could have been.


Mayor John W.D. Bowling said that he had "sensed something was wrong all year," but he "hated to say things in public to avoid embarrassing people."

Bowling said the commissioners could talk about the finance director, but that he blamed the management of the city.

Steve Biven was forced to resign his position as city manager in April 2003. Long-time bookkeeper, Fran Pendygraft, retired that same month.

The audit considered the city's finances from July 2002 -June 2003.

No bookkeeper was hired. Those duties were left to Steve Winfrey, who was forced to resign his position as city finance director in December 2003.

Commissioner Terry Crowley said, "This Commission should take responsibility for the sloppiness of this audit and the disruption that this Commission caused when they came in. Members of this Commission have refused to fill positions in the finance department."

Crowley said that instead the commissioners let the duties fall to Assistant City Manager Bridgette Milby.

Butler said that he had to perform bookkeeping at the city, and that never should have happened. He also said he had to redo the fixed asset report, which had been left to Milby to prepare.

Bowling said that he looked to new City Manager Darrell Blenniss to oversee the finances now.

Crowley said he didn't think that Blenniss could be finance director and manage the city.

Later, Bowling brought up the 2001 audit, which found some of the same mistakes as this audit, and found that city revenue had been underestimated by $2 million.

"The good news is that although there was sloppy bookkeeping (in 2002 -2003) ... the city is in good shape," said Commissioner Jamey Gay.

Butler's audit reports that the city had about $600,000 of unrestricted cash, and that would fund the city for about 11 months, if it stopped taking in any money.

"That's a good cushion," he said.

Findings from the audit

Here are the findings from the audit:

* The audit was late because Butler couldn't get the necessary information from the city to prepare it.

* The financial statements were not being reviewed at any time during the year.

* The single biggest transaction the city made in 2003, a $3.46 million bond refinancing, was never posted.

* Purchase orders were made out after items were bought, and in some cases were not signed at all or signed and approved by the same person.

* A cash drawer with a "substantial amount of cash" was left unattended on top of the counter at the front of city hall.

* In January 2003, the city stopped making a $2,085 required transfer to a reserve account for water and sewer bonds.

Butler reminded the commissioners that the city had a responsibility to keep its financial statements current and correct, so that bond holders, investors and the public could review accurate accounting of the city's finances.

He said that he had fixed the errors, and the city would receive another bill for the extra time he spent there.

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