Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance topic
No spam. Unsubscribe anytime.
Auditors report problems in Neptune Beach books; disclaimer issued on major funds
Summary
Purvis Bray presented the city audit for the year ended Sept. 30, 2023, citing accounting and internal-control weaknesses that led to a disclaimer of opinion on the General Fund and Water & Wastewater Fund because of roughly $400,000 in unidentified credits; auditors listed 10 control issues but did not detect misuse of funds.
Purvis Bray, the audit firm handling Neptune Beach’s fiscal-year 2023 examination, told the council on July 7 that the audit process encountered several material recordkeeping problems that prevented the firm from issuing an opinion on the two largest funds.
The auditors reported about $400,000 in miscellaneous credits in a clearing account that could not be fully identified as general-fund revenue or other receipts; because of that unresolved balance and a cluster of reconciliation and approval issues the firm issued a disclaimer of opinion on the General Fund and the Water & Wastewater Fund. Purvis Bray also listed a series of accounting, internal-control and process weaknesses, including the financial-close process, cash reconciliation, payroll approvals, manual journal entry approvals, capital-asset accounting and timely audit submission.
The audit presentation noted the city used $3.2 million in American Rescue Plan Act (ARPA) funds in 2023 for public-safety payroll, which helped boost general-fund revenues that year. Auditors also flagged the Sanitation Fund’s operating deficit (about $300,000 as of Sept. 30, 2023) and said the council had addressed that shortfall with 2024 rate increases.
Despite the disclaimer for the two largest funds, auditors said other city funds received modified or unmodified opinions and that the city’s overall general-fund position showed $7.6 million in assets and an unassigned fund balance of about $5.2 million after accounting assignments used to balance the 2024 budget.
Council members asked whether steps were being taken so the same issues would not recur. Staff and auditors said they were improving accounting controls and expected to complete outstanding audits and adjustments by December or, if more complex issues remain, by early 2026. The council directed staff to provide status updates and to bring an implementation plan to the finance committee.
‘‘By the time the accounting records were sorted out, we were left with this year about $400,000 of credits, which we presume are mostly revenues and that are in the general fund,’’ the auditor said during the presentation. The auditor also told the council the city’s pension plan posted a strong investment return in the year reported and that the pension funded status was approximately in line with statewide benchmarks.
The presentation and council discussion will inform near-term steps to strengthen reconciliation practices and to meet statutory deadlines for future audits.
