HATTIESBURG, MS (WDAM) - With one month left in 2017, the City of Hattiesburg is still dealing with issues surrounding the financial audit from 2015.
Elton Sims with Carr, Riggs and Ingram Accounting Firm presented City Council with a final draft for the audit for Fiscal Year 2015, ending on September 30, 2015, at Monday evening's agenda setting meeting.
With that final draft presentation, council members were shocked to hear there was also a new bill that needed to be paid for $110,000.
"My confusion is this council has been left in the dark, in my opinion," Jeffrey George said.
The accounting firm was hired by former Mayor Johnny Dupree's administration to take care of the 2014 and 2015 audits. The original contract was $103,500, which the city has already paid.
But, Sims told Hattiesburg Mayor Toby Barker and council members there needs to be an additional $110,000 paid to the firm to receive a final, electronic copy of the audit.
"I think we might owe some, but I don't believe it's to the extent they are asking and I'd like to see an itemized invoice of what they are asking us to pay," Council President Carter Carroll said. "Its over twice what the original contract stated."
Sims told council members the audit the firm was hired for was more than an audit and they were faced with a challenge, which translated into the thousand of dollars in overages. Carroll said an invoice of those overages were never sent to City Council to approve and sign off on.
"We realize this firm walked in and the environment they walked into to get this information was probably not the most ideal, did not reflect the best practices," Barker said. "But, this is the firm that did the 2014 audit, so some of those practices should have been predicted before hand."
Both Carroll and Deborah Delgado asked about the scope of work the firm's Jackson office had handled prior to contracting the City of Hattiesburg. Council members learned the Hub City was the largest in Mississippi the office had ever done an audit for before.
"They had performed the 2014 audit, so they knew any inefficiencies that we had," Carroll said. "Whether it be staff, whether it be record keeping, software - they should have been very familiar with that. We did not blindside them in any way."
Barker said the electronic copy is needed to send to agencies for compliance, like Moody's. The agency gives cities bond credit ratings, which are basically like a personal credit score. Moody's stopped rating Hattiesburg in November of 2016, which means the city could have a more difficult time if it needed to borrow money for projects.
"The consequences of us being this late with our audit from 2015 are plentiful," Barker said. "From the Federal Transit Authority, CDBG, with our bond rating that was suspended earlier. So it's important that we get this out to those rated agencies and those governmental agencies for compliance, immediately."
The audit pointed out several issues the city is falling short of with procedures, processes and how it accounts for things.
"We as an administration, as the city council, have a duty to safeguard the tax dollars of the citizens of Hattiesburg," Barker said. "So we are going to make sure any contract we sign in to, whether previous council or current council, make sure we are meeting our obligation, but making sure our tax payers are not being taken advantage of."
Sims said he has worked in the business for 30 years and had never been this late on an audit before.
He told council members the firm will never do an audit for Hattiesburg again and they would have to find another firm to do so, to which Carroll responded, "that won't be a challenge."