Rincon City Council members were handed their 2013 audit, which pointed out two material weaknesses.
Donald Caines of Caines Hodges CPA said there were two internal control concerns, and both are considered material weaknesses. One of them involves revenues and receivables, which were overstated.
“What was a material weakness in 2013 has corrected itself in 2014,” he said.
The other concern stemmed from improperly recorded purchases, which were made in 2013 but not put on the ledger until 2014, when the purchases were paid.
“That dealt with mostly capital asset purchases,” Caines said.
The bulk of that centered around approximately $270,000 spent on equipment and items for the Macomber Park expansion that were delivered in late December 2013, but the invoices weren’t paid until early January 2014.
“It does not indicate fraud and it does not indicate the intent to misstate,” Caines said, “but we did have the issue. There is a procedure in place to make sure we get the right accrual. I think the confusion was is that it was budgeted for 2014.”
Caines also said there were significant interfund balances, which should be paid off within a year. The fund for the city-owned golf course, Lost Plantation, will repay the cash transferred to it from the city.
“It is the city’s intention, and the city has the ability, over time to repay the loans,” Caines said. “Is there an amoritization schedule? No. But is there a plan for the golf course to be profitable and pay this back over a period of time? Yes.”
City Manager Wesley Corbitt said the golf course has gotten to a break-even point. The city approved in December 2011 buying 50 new carts for the course, at a price of $141,500.
“We actually paid the golf carts back,” he said. “With depreciation, there might be a gap loss.”
Corbitt said the course is scheduled to pay the city back $1,000 a month.
“It’s a start,” he said. “We’re not adding to the amount (owed). But we should start chipping away at it.”
The city’s tax revenue climbed $180,000 in 2013, mostly from sales taxes, Caines reported. Occupational taxes were up $17,000. The city’s intergovernmental revenues increased $300,000, with $223,000 coming from service delivery agreement payments and $45,000 from a state Department of Transportation grant.
General government expenses were up $400,000, mostly from capital outlays, Caines noted. Other expenses also increased, especially in salaries, as the city has added employees over the last few years. The police department is fully staffed at 17 slots, the city has added full-time firefighters and taking over the golf course also meant adding that staff to the city’s payroll.
Caines said here were no difficulties working with the city’s management on procedures.
“I appreciate the thorough job you and your staff do,” council member Reese Browher told Caines.