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Grants drive up audit cost

 

November 28, 2019



The law requires Casey Peterson and Associates, Moorcroft’s auditors, to conduct a full financial examination this year because $750,000 of the project funding the town received during the last fiscal year was federally based, explained representative Deidre Budahl at Monday night’s council meeting.

“We weren’t originally planning to do that, we were doing a review,” she said.

This full audit will cost the town between $12,000 and $18,000 according to prices quoted in previous years. However, due to Clerk/Treasurer Cheryl Schneider’s attention to this possibility, $20,000 has been budgeted for the last two years so the unexpected cost will not be a detriment to existing resources.

Departments

Budahl explained further that, because of the federal aspects of the situation, this audit will be submitted to the government for review of the town’s internal controls, such as how the clerks deal with there not being enough personnel to maintain good financial safeguard policies.

“There are times when there is only one person in the office, so people could be performing incompatible job responsibilities,” she said.

Schneider was commended for her forethought as she and Deputy Clerk Jodi Clark have been undergoing cross training and rotating of responsibility:

“One month she will do the cash receipts and the next month Jodi will, which is a really good thing to do to help mitigate those risks.”

The municipality is, though, out of line regarding overspending of a department budget.

“When you over-expend in a department line, it’s considered noncompliance with state law,” according to Budahl, who advised, “Department heads [should] be held accountable for budget overages – they need to be monitoring [their budget] as well, they need to be part of that system.”

Landfill

Another issue identified is landfill user fees. Budahl stated, “We noticed that the town is not charging appropriate user fees to fund the estimated closure and post closure costs.” This inevitable eventuality is expected to hit Moorcroft within the next ten years.

The estimated cost of said closure and post-closure responsibilities for the town is approximately $1.6 million. While the state may be able to help to an extent with grants, Budahl continued, “The town may have to come up with nearly $900,000 and, at present, there are not sufficient reserves to pay for that.”

Town Attorney Jim Peck spoke to the issue of higher tipping fees at the landfill, noting that, while the fees are in fact the lowest in the area, the state is not going to accept an application for funding to help with closing and future monitoring of the facility when the town has not charged enough to help itself. “That’s not going to happen,” he said.

MTC

Of the $101,000 deficit under which the town is currently working, Budahl attributed the “primary” culprit as the Moorcroft Town Center. With that said, she noted that the revenues are in fact relatively stable and the expenses have actually decreased by $11,000 over the past fiscal year, “But it is operating at a pretty significant budget deficit of $24,000 for 2018.”

Moorcroft Mayor Dick Claar said of the funds subsidizing the MTC, “We realize that we don’t take in enough money to cover the expenditures, but we’re okay with doing what we’re doing as long as we don’t take it out of the restricted funds when we make amendments at the end of the year.”

Schneider later stated, “The town is trying to make it more profitable by renting rooms and restructuring that building and we’re glad that there’s an outlet for people to rent out that space for activities.”

Action

Peterson and Associates have created a “corrective action plan” to address the aforementioned issues; one of the suggestions is quarterly budget meetings, another is to monitor and amend the budget as necessary instead of the current method employed by the council of amending at the end of the fiscal year.

Another idea they are promoting is to train all department heads, ensuring that how to monitor and manage the budget is understood and is handled appropriately. As for the landfill, Budahl advises working with the engineer to review the plan for the facility and evaluate the costs to determine the appropriate user fees.

Overall, Schneider considers the report to be as good as can be expected.

“I think we’re doing everything right that we need to do. Deidre has given us very good guidance, we work closely with our auditor; if anything comes into question I pick up the phone and call her to make sure we are in compliance,” she said.

The town will have to invest in another full audit in the 2019/2020 fiscal year because of the federal money involved with the funding of the coming Powder River Water Project.

 
 

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