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New Hope city leaders react to troublesome audit

By Jeanie Powell - bio | email

MADISON COUNTY, AL (WAFF)- The city of New Hope is reacting to the findings of a state audit that named 19 noncompliances in the city's finances.

Mayor John Howard added the audit to the agenda at Monday night's city council meeting.

As of Monday night, the city's administrator and water clerk have both been placed on adminstration leave with pay indefinitely.

The audit started with the municipal court, covering October 2007 to April 2009 and also includes matters relating to city operations.  Nineteen issues of noncompliance were noted.  The ranged from deposits not being made on time to $9,000 missing from water and sewer services. Also, wages to the city administrator weren't included on her W-2.

New Hope city attorney Doug Martinson, Sr. said when the new mayor began the budgeting process for 2010 he hired an independent auditor to look into the city's finances.

That was late spring.  Shortly after, the Examiners Office called for an audit.

"They said that the city had not been audited by the state in seven years," said Martinson.  "They decided to expand the audit to other areas of the city and the independent auditor's work was stopped, but at that point in time, a lot of the independent auditor's recommendations were implemented by the mayor and the council."

WAFF 48 News asked whose responsibility it was to make sure the city's finances were being managed.

Martinson answered, "Well, those responsiblities are divided up.  The muncipal court is actually under the jurisdiction fo the municipal judge, but the municipal judge is a part time judge and only works a few hours a week.  So, the municipal judge has charge of some of the items that are in this report and those items relate to the court; the other matters are under the juridcation of the mayor."

WAFF 48 News then asked who was resposible to make sure the bank deposits were being handled properly.

"As far as a working aspect of it goes, it would be the city administrator," said Martinson.

Some of these financial woes date years back.  In fact, a separate independent auditor's report for financial statements of the governmental and business-type activities of the city of New Hope ending September of 2005 suggested some reportable conditions.

Martinson said the recent audit covered nearly two years and most of the items relating to the municipal court have been corrected.

He said some duties are being separated and the city is in the process of hiring a city clerk, a position we're told, will replace the city administrator.

Martinson said the city's not comingling funds, and water and sewer accounts are now being managed separately.

City leaders are also sitting down with a CPA who works for New Hope.

About some of the changes the council and mayor have made, Martinson said, "They've outsourced payroll to take care of the problems in writing checks for the employees in advanced so the payroll period ended.  That was one of the items on the examiner's report.  Others are daily deposits of receipts, all that's been taken care of."

Some taxpayers are asking for accountability, so WAFF 48 News asked if the missing dollars been accounted for.

"No.  We just got this audit here last Friday.  That's still under investigation. The mayor and the council are working to make corrections on 100% of these items," Martinson responded.

He addressed the council, mayor, and residents of New Hope who attended the council meeting, and wanted to stress that the city's goal is to correct and account to citizens, any deficiencies.

Martinson said the Examiners of Public Accounts didn't provide a timeline for the city at the exit conference where the findings were discussed.  City leaders were told to just get it done.

WAFF 48 News made multiple attempts to contact the Chief Examiner, who we're told is the only one who can talk to reporters.  A person at his office told us Monday he was not available to speak with us.

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