Helena West Helena council approves corrective actions after 2023 audit cites deficits, missed tax payments and weak controls

The Helena West Helena City Council on July 15 approved a set of recommended corrective actions after the city uditor—ound multiple financial control weaknesses, budget overruns and unpaid tax liabilities in the 2023 audit.

The audit found street and landfill funds exceeded appropriations by $424,531 and $524,244 respectively and reported deficit balances of $173,122 in the general fund, $192,094 in the street fund and $238,833 in the landfill fund as of Dec. 31, 2023. The report also documented unpaid accounts payable in the general fund totaling $1,036,692, including $633,585 for payroll taxes and $140,000 for housing prisoners at the county jail.

"We encountered loss of sales tax revenues nd we were undercharging on our sanitation and water rates," the mayor said in a prepared statement read to the council. "The noted failures on retirement payments, IRS funds, and the like occur because of the financial tailspin caused by charging too little on our water and sewer rates for too many years and the explosion of inflation. I believe that we can get out of this financial doldrum within the next 24 months through a combination of rate increases and reductions in expenses."

The treasurer read the auditor—inding that monthly remittances to the Department of Finance and Administration were not timely, producing penalties and interest that, together with unpaid IRS withholdings and matching, left the city exposed to additional assessments; the audit showed unpaid balances of roughly $118,351 to DFA (as of the audit ate) and $500,091 to the IRS for earlier periods.

The auditors also cited internal control weaknesses: journal entries created by the treasurer were not routinely reviewed and approved by an employee other than the preparer; credit-card transactions lacked supporting documentation in some samples; and nine unauthorized withdrawals totaling $7,332 were identified, of which the bank returned portions and $2,477 was not recovered.

The audit documented operational issues tied to the city landfill and equipment: multiple pieces of heavy equipment were repossessed after payments were missed; the report and council discussion said some equipment had been disabled or vandalized and the city rented equipment while repairs were attempted. The audit also noted a $50,000 donation from the Bissell Foundation intended for an animal-shelter kennel; council discussion showed the $50,000 was applied against an outstanding $66,000 balance related to a structure that had been installed during the previous administration without full council approval, and the building was later repossessed.

Councilmembers pressed for corrective steps and documentation. The mayor and treasurer described immediate steps: the city will have the city clerk initial and approve journal entries so a second person reviews adjustments; management will implement procedures to keep expenditures within appropriations; water and sanitation rates were increased and additional rate-setting and expense reductions were planned; and the city has entered a payment plan with the Department of Finance and Administration for payroll tax liabilities.

A motion by Councilmember Maxine Miller, seconded by Councilmember Kyle Miller, to approve the auditor—indings nd recommended corrective actions passed on a 6-0 roll call.

Council members discussed ongoing follow-up: completing documentation for prior credit-card transactions, evaluating whether additional bank recoveries remain possible for the unauthorized withdrawals, clarifying the status of vendor-repossession claims and pursuing better inventory records for capital assets. The mayor said he would present a cost-saving proposal to the council by the end of the week and asked the clerk to compile comparative staffing and payroll data for similarly sized Arkansas cities.

The council scheduled a special meeting for July 29 to consider interim actions if a permanent mayor is not appointed by the governor.