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Pickens finance director reports progress on 2023 forensic review; $50,000 set aside
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Summary
At a June special call, Finance Director Mandy Hess told the Pickens City Council that work on a forensic review of the city's 2023 accounts has identified roughly $85,000 of unallocated expenses in the utility fund so far and that the council previously approved a $50,000 budget allowance for further forensic accounting.
Finance Director Mandy Hess reported at a June special-call meeting of the Pickens City Council that work on a forensic review of the city's 2023 financial records has identified a portion of previously unallocated expenses and that the council has budgeted $50,000 to support additional accounting work.
Hess said the city's contracted accountant has determined that at least $32,000 of unallocated expenses should be reclassified to the city's water and sewer (CWS) expenditures and that the review of the utility fund has identified roughly $85,000 of the approximately $150,000 in unallocated expenses to date. "I can't give you an exact number, but I can tell you we're around 80, 85 that we have identified," Hess said.
The nut of the update is that council previously approved a $50,000 allocation for forensic accounting during a recent work session and staff are using that funding to support the accountant's detailed review and software cleanup. Hess told the council the accountant will finish the utility fund analysis and then move on to the general fund.
Hess and staff described several drivers behind the unallocated amounts: duplicated water-sewer adjustments posted to the ledger, several checks that were voided in the accounting software but nonetheless cleared the bank, and older unreconciled items that date back to 2015. Hess said staff "have made any necessary corrections and have forwarded that information along to the accountant" and that a software specialist was in the office to perform training and cleanup.
An accountant and staff member were singled out for praise during the discussion. One councilmember said staff had spent "hours and hours combing through" material from the 2023 year and that the $50,000 set aside gives the city the option to pursue further forensic work if needed.
Councilmembers asked about downstream impacts. Hess said the 2023--24 bank reconciliations may need to be redone depending on auditor adjustments, but that the current fiscal year's closeout, starting in the next month or two, should not be materially affected. The city will continue the review and return to the council with final numbers once the accountant has completed the general fund analysis.
Ending
Hess said staff expect to complete the accountant's utility-fund review before beginning the general fund work and will report final figures to the council when that work is complete.
