Hattiesburg 2014 audit reveals weaknesses in city's financial system

Hattiesburg 2014 audit reveals weaknesses in city's financial system

Four months into 2016, Hattiesburg has a complete audit of city finances and government practices from 2014.

The almost 200 page audit lists eight financial statement findings.

Six are listed as material weaknesses, which Carr, Riggs and Ingram, the accounting firm conducting the city's audit, defines as a "deficiency, or combination of deficiencies, in internal control over compliance; such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, detected and corrected, on a timely basis."

Two are significant weakness, which are defined as "deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control, yet important enough to merit attention by those charged with governance."

"The things that stood out to this auditing firm are the same things I've heard from the 10 previous audits, or at least the last 5 or 6," said Kim Bradley, Hattiesburg City Council president.

Some of the findings include city facilities not metered for water and sewer volumes, "no formal process for collecting, maintaining and assimilating information other than cash transactions process," and a software system that's not able to "produce certain financial information necessary for reporting under U.S. generally accepted accounting principles."

"Our computer system is old," Bradley said. "It is antiquated. I don't know anything about it, but I know that it presents problems for the auditors, for financial, as well as other aspects (like) accountability and city business. We're  going to have to address that."

Elton Sims, partner with Carr, Riggs and Ingram, agreed.

"It (the city's computer system) does not provide you what you really need in terms of documentation," Sims said.

The audit also reports the city's compliance with state laws and regulations. Vehicle markings on several city cars were found to be out of compliance because marking "were not appropriate width, height and color which is in contrast to the color of the vehicle."

Councilperson Mary Dryden brought up the second finding that said "the accounting procedures for municipal court fines receivable are not in compliance with accounting system procedures prescribed by the state auditor under Mississippi law."

"In the court system, they're not able to give you an accounts receivable page," Bradley said. "They've tried to come up with that, deduce that. I'm not so sure that's computer driven. I think that just has to do with what the auditor said: some elbow grease. If you want to get in there and fix it, I think you can. The council had taken some steps a few years back where we changed the court system. We have one judge. We have new clerks in there working. I was hopeful that we would have a lot of this worked out. I'm not there everyday, so I can't tell you the problem. Obviously from a financial standpoint, or accountability standpoint, we still have some issues that need to be addressed."