Familiar faces return to Fulton's commission, audit report reviewed

Familiar faces took the oath of office Monday evening in Fulton’s city hall commission room, administered by Judge Hunter B. Whitesell II, to Mayor David Prater, Commissioners Martha Vowell, Jeff Vaughn and Darcy Linn, each of whom has served in their respective capacities during previous terms of office.

Commissioner Elaine Forrester was absent from the meeting.

Jay Davis with Alexander Thompson Arnold of Martin, Tenn. presented the Financial Statements and Supplementary Information ending June 30, 2018, to the Mayor and Commissioners for their review, as well as City Manager Mike Gunn, City Clerk Helen Lee and Chief Financial Officer Lisa Morgan.

In the Statement of Revenues, Expenditures and Changes in Fund Balances, Governmental Funds, total revenues in the General Fund were listed at $1,776,462, non-major Governmental Funds, $52,779 and Total Governmental Funds, $1,829,241.

As to Expenditures, Total Expenditures in the General Fund were reported at $1,759,190, for the Non-Major Governmental Funds, $89,192 and Total Governmental Funds, $1,848,382.

Revenues over or (under) expenditures were reported at $17,272 revenue over expenditures; Non-Major Governmental Funds, ($36,413) revenue under expenditures and ($19,141) revenues under expenditures in the Total Governmental Funds.

Net changes in fund balances were reported at $201,707 in the General Fund; ($36,413) in the Non-Major Governmental Funds and $165,294 in the Total Governmental Funds.

Fund balances as of June 30, 2018 were at $1,496,959 in the General Fund, compared to $1,295,252 July 1, 2017; $390,464 in the Non-Major Governmental Funds June 30, 2018, compared to a fund balance of $$426,877 July 1, 2017; and in the Total Governmental Funds, as of June 30, 2018, $1,887,423, compared to $1,722,129 in that fund July 1, 2017.

In the audit’s Schedule of Findings, two were listed, Segregation of Duties and Payroll Tax Revenue Not Reconciled.

As to the finding the city is not adequately segregating duties related to the receiving, reconciling and depositing of cash, the effect listed was the risk of errors or fraud occurring and not being prevented or detected in a timely manner increases when accounting functions are not adequately segregated and sufficient controls are not in place.

The recommendation was for Management and the board to develop policies and procedures that adequately segregate accounting functions, with the policy to include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions and handling any related assets.

The city’s response was: “We continue to make sure no one does their own deposit. With our new system we post the payments as customers are waited on.”

The second finding, Payroll Tax Revenue Not Reconciled, the condition listed stated during the testing of local taxes receivable, the city was unable to provide an explanation or reconciliation for the difference between payroll tax revenue of $725,733 reported in the cash receipts system and payroll tax revenue of $804,275 reported in the general ledger for the year ended June 30, 2018.

The effect, according to the finding was that a determination of the city’s payroll tax revenue as reported in the financial statements was materially correct, could not be made. The recommendation was for the city to reconcile payroll tax revenue to source documents and to the general ledger account at least monthly. Any reconciling items should be investigated and appropriate adjustments made when necessary to keep all the city’s financial records in balance.

The city’s response was “we have a new computer system in place. We are reconciling payroll tax revenue to the GL monthly.”

In the absence of City Attorney Allison Whitledge, attorney Rebecca Biehslich performed the first reading of City Ordinance 2019-01, Amending Chapter 10, Section 10-132, Section L, Section 302 and subsection 302.08, Motor Vehicles, to include the procedures for the removal of abandoned and junked motor vehicles located within the city.

Among numerous requirements, regulations and prohibitions relating to junked vehicles, was wording associated with the requirement of vehicles upon which repairs or restoration processes are being undertaken, must be conducted in an enclosed, inside area. However, Commissioner Vowell asked if fencing would suffice the compliance.

Code Enforcement Officer Nathan Lamb stated any junked vehicles able to be seen from the public street, even those enclosed in fencing, are still in violation.

The ordinance requires a second reading and publication for adoption.

City Manager Mike Gunn updated the officials on work to be conducted on the city hall roof, as a result of leaks discovered in the ceiling in more than one location of the facility. He reported repairs and sealing the flat roof would cost approximately $7,300, and the work could commence contingient on temperature and weather conditions. Gunn said he also planned to solicit an evaluation of the city hall heating system duct work in the ceiling, as it appeared parts of the system had loosened and restricted air flow to individual rooms in city hall, causing uneven temperatures throughout the building.

He reported he and the city’s Chief Financial Officer Lisa Morgan were in the process of communicating with the three local banks in town, regarding services each could offer for the city’s funds. He said his plans included submitting the same specific inquiry to each bank, and then compare each service as well as rates.

Mayor David Prater, as well as Gunn and Commissioner Linn commended Fulton Fire Chief Terry Rudolph and his staff for their part in providing visits with Santa during the Christmas season, as well as providing the fire truck for Santa to make last minute rounds throughout the city. Gunn suggested Rudolph communicate with the Fulton Tourism Commission board regarding items which might be need to enhance the project for next year, as the board had expressed interest in assisting him, possibly with music and lights for the fire truck.

The Mayor asked the officials and city staff to remember the family of the late Harry Dean White, who recently passed away and was a former law enforcement officer with the City of Fulton as well as with Fulton County.

The commission adjourned from open public session into closed executive session for the purpose of discussion of personnel, and upon return into open session, announced action taken to include the hiring of Matthew Quimby as a Fulton Police Department Officer.