Other Voices | Libby Garcia: OSA Performance Audit Division educating Bay St Louis City Officials – A grim reality

January 22, 2016

On Thursday night January 21, 2016, Mrs. Sam Atkinson held a 2 hour training session with the Bay St. Louis Administration (Mayor), City Council and a handful of Bay St. Louis city employees. It was so artfully done, that there were very few questions that had to be asked of Mrs. Atkinson by the officials. The public was allowed to attend the meeting as observers only, and no comments were allowed from the observers, in an effort to maintain the training atmosphere rather than distractive rhetoric which was a good idea. You could tell that Mrs Atkinson was well versed in her field and that we all; employees, elected officials and citizens alike, could learn a lot from her expertise. I later reviewed my own notes and then listened to the tape of the session again. There were three things that seemed to primarily target the City Council:

1. The proper development of the council meeting agendas,
2. The documentation of council actions through accurate minutes, and
3. The approval of the payment of the city’s bills (Docket of Claims) through an orderly procedural chain.

Mrs. Atkinson stated firmly that there was great liability facing the Council Members if their procedures in paying the bills did not follow clear policies and procedures of verification. Verification that the bills were paid in the order they were received, that the bills were separated by docket numbers, properly dated, and subsequently logged into a docket book. She also stated that it was illegal for the Administration to hinder the Council from receiving requested information or the originals of those invoices, because it could make them vulnerable to liability. Then she said something astounding: Misspending of the public’s funds could require replacement of those funds to the public by use of the bonds of the officials that did not do their part to protect those public trust funds…. and (here is the key):

LOSS OF BOND EQUALS LOSS OF OFFICE.

Mrs Atkinson also stated several things that were actually against the law, or you could say “illegal”:

1. The Administration not presenting documentation to the Council when requested.
2. Transfer of funds without the approval of the Council.
3. Spending funds outside the budget
4. Co-mingling of designated funds and several others things that space does not allow me expand upon in this post.

I have attended the Council meetings consistently for at least six years, and have heard the Council repeatedly ask, demand, beg, and downright grovel (in my opinion) before this administration for dated original invoices in time before the meetings so that they could be sure what they were actually paying on the docket, only to be put off meeting after meeting. It has been an embarrassing display of disrespect to the Council by the Administration. All of these problems could have been avoided, had the Administration simply complied with the law. Continue reading “Other Voices | Libby Garcia: OSA Performance Audit Division educating Bay St Louis City Officials – A grim reality”

Bay City Council votes 7-0 to request DOJ OIG Investigation of City Drug Asset Forfeiture Funds

The City of Bay St Louis has been out of the news cycle here at Slabbed for a few months now but here in the dog days of August last night’s meet produced big news on a couple of fronts the main one being this morning’s City Council meeting headline. There has been chatter about the Drug Asset Forfeiture Funds since the last meeting and it was clear from Chief Denardo’s remarks last night regarding the Bay Police Department’s inability to access the funding source to make undercover drug buys there was a problem in finance. The council request asks for a review of the forfeiture accounts from 2008 forward.

Additionally Slabbed has learned this morning from a source with knowledge of City Hall operations requesting anonymity that Mississippi State Auditor’s office investigators have visited City Hall this morning requesting a meeting with Mayor Fillingame, Chief Denardo and City Clerk Smith regarding problems in the Forfeiture Funds. State Auditor’s Office Investigator Susan Syerson was in attendance at last night’s meeting.

Additionally Councilman Lonnie Falgout questioned the amount of cash currently shown on the City’s financial statements for the 2014 Refunding Bond Debt Service Fund indicating his calculations show a shortage of close to $100,000 in the fund. Mayor Fillingame promised to present a reconciliation of the cash in that fund at the next scheduled council meeting.

Finally, what started out as a dust up over how much Bond Vig would be due City Attorney Donald Rafferty turned into a bidding war between Butler Snow and Jones Walker with Continue reading “Bay City Council votes 7-0 to request DOJ OIG Investigation of City Drug Asset Forfeiture Funds”

Tuesday open

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Way back in the day I knew someone that served on the PERS Board with Mayor Mary that always spoke very highly of her. Then again he was a notorious lecher and kleptomaniac so frankly I’m not sure what to make of this except I like to see competition for public office.

I would encourage you lifers to join me in comments encouraging Nowdy to come out of retirement for one last ride on the Wind-Water waves and Superstorm Sandy. Like Dizzy Dean said, “It ain’t braggin’ if ya can back it up” and Slabbed has sources on this that no one in the for profit media, national or local can touch. I can think of no better person to tell the story than Nowdy and it is a topic that is both true to our origins and ripe for examination. Continue reading “Tuesday open”

2013 Bay St Louis Municipal Audit reveals poor financial management Part 1

Here at Slabbed we’re the proverbial Johnny Come Lately to cover the long anticipated release of the 2013 Fiscal Year Single Audit Report for the City of Bay St Louis. That’s OK though because the report was very late being released, less than two months before the subsequent fiscal year end. How can an entity improve if it waits until late in the next year to correct the Significant Deficiencies that were reported in a late submitted Single Audit? The answer is simple junior, you can’t but then again many of the Significant Deficiencies noted in the report have been reported for multiple consecutive years without correction and that too is meaningful.

That said there are two things I need to address straight away as this topic, by its very nature, requires a few posts to fully paint the picture. The first thing is that somewhere in my earlier coverage of the City’s audit process, based upon what were at times inside conversations between the City Council and the Audit Firm in a public meeting, I wrote that the audit firm was within the bounds of professional discretion with their, at that point unreleased, opinion on the financial statements. Reading the report caused me to change my opinion in a nuanced way and here is why straight from Auditing Standards (Codified), Section 570:

.16 The auditor’s conclusion about the entity’s ability to continue as a going concern should be expressed through the use of the phrase “substantial doubt about its (the entity’s) ability to continue as a going concern” or similar wording that includes the terms substantial doubt and going concern. In a going-concern emphasis-of-matter paragraph, the auditor should not use conditional language in expressing a conclusion concerning the existence of substantial doubt about the entity’s ability to continue as a going concern.

So there you go, there is no middle ground in the use of the words “substantial doubt” and “going concern” but there is a trap door for the CPAs to use just in case management, for whatever reason, chooses not to share their plan to salvage the enterprise as was the case with the City of Bay St Louis:

.18 Nothing in this section precludes an auditor from disclaiming an opinion in cases involving uncertainties. When the auditor disclaims an opinion, the report should not include the going-concern emphasis-of-matter paragraph described in paragraph .15 of this section but, rather, describe the substantive reasons for the auditor’s disclaimer of opinion in the auditor’s report as required by section 705.4 The auditor should consider the adequacy of disclosure of the uncertainties and their possible effects on the financial statements as described in paragraph .12 of this section even when disclaiming an opinion.

The disclaimer based on these circumstances is just as bad as getting the going concern qualified opinion, thus the interest shown by the Office of the State Auditor in the City’s finances after the report was released last month and this brings us to the second thing that needs to be addressed in Mayor Fillingame’s assertion the 2013 Audit Report was sensationalized by the media. I think I found what he was talking about. Continue reading “2013 Bay St Louis Municipal Audit reveals poor financial management Part 1”

Bay St Louis Mayor says news coverage of City’s audit report “sensationalized”

And just think folks, Slabbed has yet to break down the 2013 audit, which is chock full of internal control findings that indicate severe financial mismanagement under the current Administration.  Meantime Hizzoner said Stacey Pickering’s Krewe said everything was A-OK down here in the Bay but don’t take it from me.

Continue reading “Bay St Louis Mayor says news coverage of City’s audit report “sensationalized””

Mayberry by the Sea Part 1: The heat is on

Last month I caught up with an old friend for coffee. Like me, he is a St. Stanislaus alumni. Life has taken him away from the Bay though he and his family are still fairly close by over in Metro New Orleans. Like so many of you, he has been following the coverage on Slabbed of the unfolding financial disaster here in Bay St Louis. Unlike the rest of us, this guy has a career’s worth of experience in the intricacies of local government, politics and is an expert in the specialized field of Homeland Security and its application to local governments. As we visited on that topic, it was as two professionals as I took out and wore an old hat from my prior life auditing local governments.

Using Twitter to cover a City Council meeting makes it is as good as being there for those following the feed. The Council meetings in Bay St Louis are a throwback to days gone by in some respects as there are two public comment sessions, one at the beginning and one at the end of every meeting. It an example of a true participatory democratic process as literally anyone in attendance can grab the mike and let the council know what is on their mind. I’ve even seen certain hardcore meeting regulars and members of the media literally jump into a council discussion to ask questions or lend some wisdom. As a member of the public, I’m completely down with that and in fact I like it. If I were asked my opinion as a professional on the same subject however, my perspective and thus the advice I’d dispense would stand somewhat in conflict with my feelings as a member of the public. That fundamental conflict has shaped the coverage of the Bay’s financial demise here on Slabbed.

With budget season wrapping up the City has reached the fork in the road. The left fork increases taxes but beyond that would do little to improve the uneven and at times nonexistent delivery of services to the City’s residents, while the right fork would require spending cuts, that by definition would have to be so draconian that everyone would certainly feel the pain as only core services of police and fire would be relatively unimpacted. None of this counts building back a financial reserve. The challenges are daunting. I could make the case for both increasing taxes and cutting City personnel. I’m not though because there are other people which are very capably handling that debate.

Last Friday the City was visited by the Deputy State Auditor and an employee from the Office of the State Auditor’s Technical Assistance division, a story Slabbed broke literally real time. That visit and its disclosure has caused an uproar. Last Tuesday night, after I left the City Council meeting, Mayor Fillingame evidently addressed the OSA visit to City Hall and he made certain assertions regarding what the Auditor’s Office employees had to say about their visit. Word of the Mayor’s report evidently made it up to Jackson and Stacey Pickering at light speed and that prompted an official statement yesterday afternoon to the Hancock County Alliance for Good Government which I published along with the HCAFGG statement on the subject. I fully intend to get to the bottom of this matter myself and share what I find with everyone because the public needs to know, especially when their taxes are on the verge of going up 28% according to published reports.

Once, a long time ago in a small Mississippi municipality far away, the Mayor and local Board Continue reading “Mayberry by the Sea Part 1: The heat is on”