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Audit review raises staffing, timing and reporting questions for Franklin City finances
Summary
Councilors questioned a recently released audit about staffing turnover, the timing of capital expenditures that made expenditures exceed revenues, and a roughly $25,000 contractor fee; staff said a late contract and audit parameters delayed work but reconciliations are available.
An external auditor reviewed Franklin City’s recent financial reports and answered council members’ questions about scope, timing and specific funds, highlighting staff turnover and a late contract as reasons for delayed audit work.
The auditor, who said they perform audits under government standards, told the council that report output depends on the parameters set (date ranges and account selections) and that the Comprehensive Annual Financial Report still covers material funds. “I audit the state of Virginia. The audit of public accounts provides a report every dollar that is sent to this city; we have a reconciliation sheet that we tie all those numbers,” the auditor said.
Council members pressed the auditor and staff about specific line items. A council member noted figures in the report showing revenues around $32,455,000 and expenditures near $41,800,000 and asked why expenditures appeared higher. City staff and the auditor explained that capital spending and bond-funded projects — cited in the meeting as the Armory project, a radio project and courthouse renovations — can cause that timing difference, with bond proceeds and capital outlays causing expenditures to appear larger in the audit phase even when cash inflows are recorded differently.
A council member also asked whether court fine revenues are included depending on whether a charge is under Franklin code or state code. The auditor explained that if a fine is assessed under city code the proceeds come to the city; if handled entirely through the state court process, the money is recorded at the state level and then reconciled.
The council asked about the audit contractor’s fee; the record shows a contractor cost of about $25,000 for the reported engagement. Councilors also heard that the audit contract was signed roughly six months later than it should have been, which delayed the audit schedule.
Council members said the audit would inform the next year’s work; the record notes the 2025 audit work was scheduled to begin the following day. No formal acceptance vote of the audit was recorded in the transcript during this portion of the meeting.
The city manager said staff can provide reconciliations and follow up with specific pages referenced in council questions, and councilors asked staff to provide any outstanding legal or procedural clarifications at the next meeting.
