Auditors find 'deficiencies' in city books

Payments OK, but receipts missing, Helena mayor says

— An audit critical of Helena-West Helena found numerous "significant deficiencies" in the city's finances during 2007, including nearly $20,000 in improper disbursements to Mayor James Valley.

Valley said Tuesday that the problem is a lack of receipts. There is nothingwrong with the reimbursements he received from the city, he said.

He said auditors seemed to be overly aggressive, more so thanwith previous audits he's been involved in with the city and Phillips County.

"I've never seen anything like this," Valley said. "I don't know what's causing them to cast this broad net. I think they were quick to declare something undocumented or improper. Why they combed through all the records on me, I don't know. They had me go back and justify every trip reimbursement since I've been mayor since 2006."

Deputy Legislative Auditor June Barron described the audit as "routine" but said there are reasons why her staff would seek more information.

"Obviously, when we find issues, when there are items being paid for and no documentation, we expand our test," she said.

The audit by the Legislative Audit Division, which made it public, will be presented at a legislative committee meeting Oct. 7.

The audit found $59,466 improperly disbursed to elected officials and employees.

"These disbursements consisted of travel advances not subsequently documented, items not documented for a public purpose, alcoholic beverages, conferences fees and meal expenses for non-employees, other nonbusiness undocumented items, expenses which had previously been reimbursed, and unallowable expense reimbursements for meals incurred without an overnight stay," the audit report said.

Of that amount, Valley received $19,907, Treasurer Michael Boone $2,920, and three aldermen each received $300.

"There may have been some misplaced or mislaid receipts," Valley said. "It's difficult to tell. When I talked to the city clerk, she said she had given all that stuff to auditors. But the auditors said it's not something they have. What do you do? What I intend to do is aggressively look for additional documentation. Whatever I'm not able to present in a documented form, I'll pay, although there is nothing that I've gotten that I don't believe I was entitled to."

He said the city clerk, Sandra Ramsey, is elected and he has no authority over her.

Ramsey told auditors that the city will develop a more detailed travel policy.

Boone, who is also an elected official, didn't respond to auditors. He didn't return a message left late Tuesday by the Arkansas Democrat-Gazette.

Barron said the questionable reimbursements for Valley were for travel and training without a stated city purpose or proper documentation. He also couldn't produce receipts for supplies that he bought for the city, she said.

"He also got reimbursed for the same expenditure by submitting duplicate receipts, but that was probably just an error," she said.

Boone received reimbursements for travel for himself or other employees that lacked documentation, she said. Boone repaid $178.

The audit also found that the city spent $100,347 to urge people to vote for a sales-tax increase during an election in 2007; to pay expenses for an alderman's funeral; to buy flowers, banquet tickets and school uniforms; and to make donations to alumni associations.

Valley said the audit unfairly lumped all of those items together.

"If you weren't printing this for the whole state to see, I would use profanity," Valley said.

He said the city spent only $10,000 to $15,000 to supportthe sales tax, which was approved by voters. He said that money came from private donors as did the money for school uniforms.

He said auditors cited the city in 2006 for using city money to support a sales tax election. So the next year the city used private donations. He said he can't understand why auditors still say what the city did was wrong.

But Barron said, "There is no documentation to support the notion that it was a donation, no deposit ticket to indicate the source of funds, nothing in the records."

The audit also said the city wrongly made payments of $79,393 to city employees in addition to their salaries without the City Council first passing an ordinance allowing them.

Those included $51,270 to City Attorney Andre Valley, the mayor's brother, for services in 2005.

"That's just a bunch of mess," Valley said. "Everybody knows we're brothers. Most people think we're twins."

The mayor said the payments to his brother were his regular hourly rates and that an ordinance wasn't needed because his brother is an elected official.

"I'm very disappointed in the process," Valley said. "But hopefully, our employees and elected officials can be better trained to where we never see this kind of audit again. It's unfair and condemning some good people."

Also, according to the audit, the city:

Failed to properly segregate duties of those involved in city finances to reduce the risk of error and fraud.

Failed to deposit $604,502 in state highway dollars into the street fund. It's unclear how that money was spent, Barron said.

Didn't keep complete records.

Failed to reconcile revenue from the city's golf course and landfill.

Misstated cash, receipts and investments.

Paid for cellular telephones that auditors couldn't match with a city employee and paid for personal phone calls.

The audit also noted that Boone is employed with Southern Financial Partners, an affiliate of Southern Bancorp, the city's primary banking institution. This needed City Council approval, Barron said.

Arkansas, Pages 9, 13 on 09/30/2009

Upcoming Events