The Daily Southerner, Tarboro, NC

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May 14, 2012

State’s patience growing short with Princeville

Staff Writer Calvin Adkins

TARBORO — The State and Local Government Finance Division of the Department of State Treasurer has given Princeville officials until June 4 to respond to an eight-page letter detailing 19 "material weaknesses" in the town's internal control structure.

The May 7 letter was addressed to mayor Priscilla Everette-Oates with copies to the interim town manager, the town's four commissioners. the town's CPA firm and the town attorney. It was the fifth letter sent to town officials regarding the 2010-2011 town audit and called for immediate action.

"It is clear from the pervasive nature of these finding that the town faces serious deficiencies in its operations and its governance," the letter, signed by fiscal management section director Sharon G. Edmondson, CPA,  states. "The problem areas addressed in this letter require immediate corrective action."

LGC requested the town to submit a corrective action plan addressing each finding, along with additional concerns specified in the letter. The agency also requested a working draft of the 2012-2013 budget, monthly interim financial information from September 2011 through the present and signatures by all the members of the board "as evidence they understand the gravity of the issues that it faces in returning fiscal health to the Town."

Princeville attorney Chuck Watts said in a written statement Sunday he believes the town will meet its deadline.

"The Town administration has been at work on this set of issues since the draft audit was shared with the Town by the auditor. Personnel change was the first step. Improved collections of revenue from water and taxes is the second."

The audit, which was submitted six months late, received a qualified opinion — which means serious deficiencies were found in the operational of the town. The audit exposed the town's poor financial condition, bookkeeping problems and overall neglect of managerial responsibilities.

Commissioner Gwen Knight said she was not surprised about the findings or the latest letter.

"It was expected," Knight said. "But I'm disappointed that LGC keeps sending letter after letter. Somebody should have come down here by now and straightened this mess out. We don't have any money and their is nobody qualified to do paperwork at the town."

After LGC's fourth letter, dated March 22, the town submitted a two-page corrective action plan, but failed to abide by one of LGC's request — the inclusion of signatures from all commissioners. At least two commissioners, Ann Howell and Knight, said they were not given an opportunity to view the audit until it was submitted.

"How can the mayor make a decision to not allow me and Commissioner Howell see and analyze an important document like the corrective action plan before submitting it to LGC?" Knight asked. "It is ridiculous. That's not how a democratic form of government works. Whether they like it or not, we are part of the board. After we got a chance to read what they had submitted, it didn't make any sense."  

Apparently LGC was not satisfied with Princeville's response, either. The town basically blamed former manager Victor Marrow for the majority of the audit shortcomings.

"The audit presented two sets of problems," Watts said. "It starts with the poor record keeping and accounting practices under Victor Marrow.  The lack of good records made management of the budget difficult, as the audit also notes. Though the Town's financial standing has seen some decline we believe that improvements can be made before the end of the fiscal year. We've already seen improvement in collections of water bills."  

LGC's fimost recent letter precisely detailed the 19 material weaknesses listed in the audit and specifically noted items that must be addressed, including:

• The town needs a well-trained, qualified finance officer and manager in order to implement the many corrective actions that need to occur.

• Collection of water and sewer fund must be improved.

• The board and staff must gain an understanding of basic internal and accounting controls necessary to function according to the statues and generally accepted accounting principles.

Travel expenditures must be documented in accordance with IRS requirement in order for travel cost paid with town funds to not be considered wages.

• The board must develop a plan to improve the tax-collection process.

All North Carolina municipality audits were due last October. After Princeville failed to meet its deadline, LGC began sending letters to the town starting in January in an effort to get them to submit the audit.

The language in the latest letter is the strongest yet.

"The poor financial condition and lack of internal controls are unacceptable and must be addressed by the board," the letter states. "This letter presents the town's vulnerable points and should provide an outline for immediate board action needed to rectify theses issues.

"It is imperative that the board work together to make the necessary improvements to the town financial operations."

Watts agreed.

This is a serious matter for the Town, the entire town," he said. "It is not a matter for one side or the other to feel differently about. It is something that needs to be and is being addressed."  

 

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