“Sloppy Bookkeeping”Public Calls for Forensic Audit by Breeanna Jent - City News Group, Inc.
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“Sloppy Bookkeeping”Public Calls for Forensic Audit

By Breeanna Jent, Staff Writer
August 21, 2014 at 04:24pm. Views: 150

Residents called for the Colton City Council to request a forensic audit of Colton’s books after auditors in December 2013 located an accounting error showing over half a million additional dollars in Colton’s finance records. The council voted to approve a forensic audit of the 10-year-old error and asked that staff determine how much money of the exact $642,000.02 accounts receivable funds deemed uncollectable was collected and if those funds were credited to the proper accounts, approving the resolution on the condition that a large portion of these accounts are not deemed “written off” but rather “reconciled” to accurately reflect the city’s actual finances. Resident Linda Tripp told the council, “When you are expecting money to come to you, you don’t go out and look for it when it doesn’t come. When it does come, you check it off. That should be the responsibility of every single department in this city.” She added, “You can’t let this go and go and go. It’s probably one of the underlying problems of this city’s incapacity to be balanced. This is crazy… You could not get away with doing anything like that, on your own or with a business.” Electric Utility Director and Acting City Manager Dr. David Kolk said the mistake wasn’t “something we are particularly proud of,” but said it is common practice for businesses to “write off” a certain amount of accounts receivable. He told the council he and Finance Manager Jessica Hurst could not explain why past employees did not reconcile accounts receivable once the funds were paid but assured the council that from 2010 on, when a new accounting team was brought in, there have been very little write-offs. It is believed that much of these moneys have been received, Kolk told the council, but they weren’t marked as received in the accounts. Kolk also said he wasn’t sure if the moneys received – most were for false alarms and code enforcement services, according to staff reports – were received into the correct accounts. “It should have been done,” Kolk said. “It wasn’t. There’s no excuse for it.” Responding to the public’s accusations that the city was lax in collecting payments due, Kolk said, “The cash came in. This wasn’t a question of us not collecting dollars. Some of it is, but most of the dollars here were collected, but in the accounting department they weren’t properly accounted for.” The unmarked funds “made the fund balances for each department look better than they are,” Kolk said. The monies in question are as such: $163,752.46 in the general fund; $30,225 in the electric fund; and $448,022.60 in the wastewater fund. Without a finance director, and with the announcement of Finance Manager Hurst’s departure, which Kolk announced Tuesday evening, the cost of the forensic audit and further details will be brought to the city council at a later time, when each department director is ready to come before the dais, as Mayor Pro Tem Isaac Suchil suggested. Further checks and balances set in place including the council asking to see accounts receivable reports on a quarterly basis and that employees understand accounting processes are other stipulations the council asked for. Councilmember Frank Gonzales said the council was not trying to hide information. “Nobody was minding the store,” he said of the city officials responsible for balancing the books. “We sit up here and we need to ask questions. We are sitting up here and trying to be truthful with the community at large to make sure what happened 10 years ago isn’t going to happen anymore. Period.”

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