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Trustees question pooled-cash accounting, seek outside audit for DIA funds
Summary
Finance staff reported November balances and revenue; trustees raised concerns that the city’s pooled cash practice mixes Industrial Authority funds with other city funds and asked for independent audit clarity.
Finance staff provided trustees with a November financial overview at the Jan. 7 Durant Industrial Authority meeting and trustees raised concerns about the city’s use of pooled cash, which mixes DIA funds with other municipal funds.
Cara (finance staff) said the authority is about 41% through its fiscal year with a current bank balance of roughly $382,000 in account 110. She reported $95,587 revenue for November in account 110 and year-to-date revenues of approximately $141,000; account 020 figures were also summarized. Cara said year-to-date totals and cash balances appear in the financial packet and that she will follow up with Executive Director Kathy and Anne Chen on a few items that need clarification.
Executive Director Kathy told trustees her review found DIA money held in a pooled-cash account managed by the city. She said the quarter-cent sales tax intended for job creation, infrastructure and land acquisition appears to be combined into pooled cash and that she asked Anne Chen whether the DIA’s portion of pooled-cash interest is being allocated back to the DIA. Kathy said that question is not fully resolved and that trustees are exploring an independent outside audit and possibly hiring separate accounting services for the DIA.
Trustees asked for an auditor’s opinion to confirm whether pooling is appropriate and whether interest earned on pooled cash is correctly allocated. Kathy said the city billed for the audit and that the DIA’s most recent audit “passed,” but she still seeks greater clarity about pooled-cash accounting and the path for ensuring compliance with the sales tax ordinance’s restrictions.
Cara and Kathy said they will continue reconciling figures and follow up with trustees with more detail. Trustees did not take formal action beyond requesting further review and discussion about hiring an outside auditor and clarifying interest allocation to the DIA.
The authority did not adopt budget changes or new accounting policies at the Jan. 7 meeting.
