Audit examines citys purchasing controls

by: Spotlight graphic REPORT — Audit outlines places where the city could improve, and where it’s doing well.

Despite a future of dwindling revenue and layoffs, St. Helens' financials are on sound footing, with little debt, according to an audit report presented to the city last week. But maintaining financial controls to ebb the undocumented flow of money continues to persist.

The city's annual audit highlights material weaknesses in financial reporting and with safeguarding the city's stock of blank checks. And though the audit was performed more stringently than in past years, due to stricter standards, some city councilors questioned whether it could have gone further.

'I can tell you there were some compliance issues last year, and there were some the year before that, but I couldn't tell you what they were,' said Councilor Doug Morten during a presentation of the audit. 'It would be interesting to see [what those were].'

The city's annual audit does not address every problem the city has, according to auditors.

'We can't look at everything,' said Brad Bingenheimer, an author of the audit for Boldt, Carlisle and Smith. 'If we looked at everything, we'd be here for a year.'

Auditors did examine more city services than in the past, they said, due to the stricter standards.

Those new standards came as a result of the federally mandated Sarbanes-Oxley Act. Passed in 2002 in the wake of the collapse of Enron, the act enhances auditing requirements for publicly traded companies as well as municipalities.

Chief among the changes are new requirements to periodically assess and certify a municipality's internal controls, the process by which a city manages and restricts spending or transfers from its various accounts.

Refining and improving that process has been a goal for the city for the past several months.

Though not specifically mentioned in the audit, one internal control lapse occurred in December 2010 when it was discovered city officials signed off on expenditures totaling $12,280 during a spending freeze to purchase new Christmas decorations, as The Spotlight first reported.

At the time, Mayor Randy Peterson said he didn't know the city had purchased the new decorations.

Other specific concerns outlined in the budget relate to accounting practices, including how the city billed for projects and accrued end of year expenses.

The audit wasn't entirely critical, however. Auditors said the city had done a good job of paying down its debt.

'There's actually a very small amount of debt' for a city of St. Helens' size, Bingenheimer said.

Jon Ellis, the city's finance director, said the city has focused on reducing expenditures in light of reduced revenue.

The city has resolved some of the problems addressed in the audit, such as unsecured blank checks and an unlocked system for printing them out, Ellis added.