02/08/11 — Mount Olive reviews new audit findings, considers adding new person to roster

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Mount Olive reviews new audit findings, considers adding new person to roster

By Steve Herring
Published in News on February 8, 2011 1:46 PM

MOUNT OLIVE -- Town commissioners Monday night accepted without comment the town's audit for the year ended June 30 only later to come out of a closed session and authorize Town Clerk Arlene Talton to make recommendations to the board concerning hiring additional help to resolve audit issues.

The board met for 35 minutes in a closed session called to discuss personnel and possible litigation over the town's new sewer system.

No mention was made of the litigation or sewer system when the board returned to open session. However, commissioner unanimously agreed on Mrs. Talton negotiating for part-time help in her department.

The decision is the outgrowth of audit findings concerning a lack of separation of duties, due mostly to a lack of personnel, and recommendations by the Local Government Commission.

"What we are interested in his somebody with a background in accounting or something like that would like to work part time," Mayor Ray McDonald Sr. said in an interview. "Mrs. Talton has a certain way to do things. That is the reason I wanted to have the meeting to have the board to give her the authority to negotiate with that person."

According to the audit no one within the town's personnel "possesses sufficient accounting knowledge and experience to determine if the financial statement are prepared properly." It recommends that the town outsource the procedure.

Having such a person in the office is something that the Local Government Commission will like, too, McDonald said.

Also, McDonald said that Local Government Commission officials told him that as mayor it was his responsibility to ensure that recommendations in the audit are carried out.

Last Friday, McDonald, Mrs. Talton, Commissioner George Fulghum and Town Manager Charles Brown met with Local Government Commission officials in Raleigh.

Just prior to Christmas, a Local Government Commis-sion official met with the town board to review recommendations. In a follow-up talk, the official recommended the additional person.

'We have to put it in the budget. We just can't go and hire a part-time person," McDonald said. "The way they have instructed Charles to prepare the budget any addition has to come before this board and be approved."

McDonald said he was unsure how much the part-time person will cost or how many hours would be involved. It is possible that the position could eventually become full time.

McDonald said he had asked for last week's meeting with the Local Government Commission.

"I set it up," he said. "I wanted them to tell us exactly... what I don't want is one thing at a time. Tell us what we can do get it straight to satisfy you all. They went over everything they wanted."

In one case, the town had been unaware that the law had changed regarding how money is transferred out of federal grants into a local budget.

"For example if we front money for a project how do we get it back where it ought to be?" he said. "There is a time limit. Borrowing money there is a time limit on that stuff. We went up and said look you recommended that we have another person in the front office so that we can separate duties is what it is. They want us to get that audit on a timely manner.

"(The new person) will be trying to get the grants straightened out for us to make sure that we are complying with that grant. If you read the grant and it says you can spend money for this and money for that then that is where the money is spent."

According to the audit findings, all revenue received or expended by the town should be included in the budget -- something the town has not done.

The audit notes that the town has expended monies in several town departments that had not been appropriated. It recommends that budget amendments should be adopted when revenues are received that exceed estimated revenues in the budget prior to expending those funds.

It also notes that the town did not receive Local Government Commission approval prior to obtaining a $200,000 installment loan. The recommendation was that town officials needed to familiarize themselves with contractual laws.

When the next audit comes out the town wants it "clean" and without the "little things," McDonald said.

For example, the town has $350,000 in its fund balance, but the Local Government Commission wants it labeled as contingency, he said. The town had been putting it all in one account, but the commission wants it separated into contingency and fund balance, he said.

"They want the fund balance satisfied. The only time you use the fund balance is when there is an emergency," he said.

Another meeting with the commission is planned for March 8 at 2:30 p.m. in Raleigh and McDonald encouraged all board members to attend if possible

While it was not mentioned during the meeting there has been a problem with the new sewer plant moving water to the town's spray field.

When the town built its wastewater treatment plant beginning in 2006, the contract with the Southern Pines-based civil engineering firm of Hobbs, Upchurch & Associates stipulated that the plant would be able to pump an additional million gallons of water to the town's spray field.

Town officials have said the town does not want a court battle if the issue can be resolved without litigation. However town officials have contacted Raleigh law firm Moore and Van Allen and met with Hobbs, Upchurch & Associates representatives about the problem.