News Column

Rincon audit finds two material weaknesses

July 30, 2014

By G.G. Rigsby, Savannah Morning News, Ga.



July 30--The annual audit of the City of Rincon's finances for the year ended Dec. 31, 2013, found two material weaknesses.

The report by Caines, Hodges & Co. P.C., of Rincon found two internal control issues: revenues and receivables not property reconciled and improperly recorded purchases.

A material weakness is one that could result in a misstatement of the city's financial statements.

In the first instance, the audit firm said utility fund receivables and revenues were materially misstated. "Errors were made in the reconciliation process resulting in the inclusion of revenues from one extra month in revenues and other erroneous entries," the report said.

Management agreed with the finding and said procedures will be established to fix the problem.

In the second instance, several purchases made in 2013 were not recorded in the 2013 accounting records.

"Several disbursements were noted for capital assets and other items ordered in 2013, received in 2013, but recorded as 2014 expenditures," the audit said.

Management agreed with the finding and said procedures are in place to prevent the problem but they were not followed.

The audit said Rincon has assets of $45.6 million and liabilities of $8 million, for a net position of $37.5 million. That's up from a net of $35.7 million a year earlier.

The golf course had expenses of $582,400 and charges for services and sales of $432,300 for a net expense of $150,100.

The city has not imposed a property tax since 1998.

The auditor also noted a "potential impaired asset" -- a well drilled in 2004 for $4,800. After the well was done, the Georgia Environmental Protection Division (EPD) wouldn't issue a usage permit for it. "This asset may potentially be impaired dependent upon EPD's permitting and alternative uses," the audit said.

City Manager Wesley Corbitt said the city was aware of both of the issues pointed out in the audit.

"The city still operates very efficiently," he said. He said there probably won't be as many projects in 2015 because the city is down to $6 million in reserves.

"We like to keep a cushion," he said.

The city has done a lot of construction, on Fort Howard Road, for the fire department, recreation complex and police department. He said 2015 will be a time to review the 10-year plan.

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(c)2014 Savannah Morning News (Savannah, Ga.)

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Source: Savannah Morning News (GA)


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