Hattiesburg audit raises concerns among council, additional audit sought

HATTIESBURG, MS (WDAM) - The Hattiesburg City Council received its annual audit this week, but there have been more questions this time around than usual.

Concerns of some members are the three qualified opinions submitted with this year's audit. There have never been opinions attached to an audit in the 37 years of Nicholson and Company's work with Hattiesburg.

Three units of the Hattiesburg government merited a qualified opinion in this year's annual audit: activities of both the government and business, as well as the water and sewer system.

One issue is that the city did not have an actuarial report to provide for the audit. That's something that is required, and according to CPA Paige Johnson is "an acceptable practice... every three to five years."

It's related to some procedures regarding post employment benefits for city employees, but without an actuary to conduct the report, the auditors cannot comply with government standards to report what it finds.

The water and sewer departments were considered to have a "material weakness", which means that policies in place for utility cutoff are not being uniformly enforced, and inconsistencies are also found in late payments, all of which could affect budgetary projections and ensure compliance with contracts, according to the audit.

"The audit is what it is," Mayor Johnny DuPree told the council Tuesday night. "It's done. It's completed. Your objective is to acknowledge it so we can move forward. If you want to do more than that, that's up to you."

And the council chose to do just that. A 3-2 vote will soon send a letter to the state auditor's to conduct an additional audit.

"Whether we get the answers we want or don't get the answers we want, I think the audit needs to be looked at," council President Kim Bradley said.

What was not specifically mentioned in the public audit is a letter to the council that was obtained by WDAM's investigative team. It offers nine recommendations, most of which deal with water and sewer issues.

An internal auditor was recommended for the city, as well as close attention to the city being in compliance with existing water and sewer revenue bond requirements and any new contractual agreements. The last recommendation in the letter is a system for tracking "unusual fuel consumption" on city fuel cards.

All of those things stand only as recommendations, but it's certainly something that has alarmed the city council. When or if the state auditor takes a second look at this report is yet to be determined.

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