Glasgow Daily Times, Glasgow, KY

Local News

February 10, 2014

Cave City Council receives auditor’s report

GLASGOW —

Cave City is in good financial shape, according to auditors.

The 2013 audit report shows the city to have a total net position of about $4.47 million, which is down by about $25,000 compared to the city’s net position of $4.5 million in 2012.   

 Drew Thompson of Gilbert and Gilbert CPAs of Glasgow reviewed the city’s 2013 audit Monday night along with city council members.

Of the three types of opinions the city could receive regarding its audit, it received the best, which is an unqualified opinion.

“An unqualified opinion, which is also a clean opinion, is what you want to get and that is what you all got again this year,” Thompson said.

In reviewing the city’s governmental activities portion of the audit’s income statement, Thompson pointed out the city had a loss of $67,000.

“A good chunk of that was actually from where you guys sold some stuff,” he said. “On the sale of the assets, you are showing a loss of $49,000. The bulk of that came on when you sold the fire truck. It still had a carrying book value to it, so whenever you sold it, I think, it makes up about $30,000 of that number, so the bulk of that number is made up out of one transaction.”

He continued that the $49,000 loss is a one-time occurrence and wouldn’t reappear in the future.

Taking that into consideration, Thompson told council members that the city has actually improved on its profit and loss statement.

“On the business side … you will see you did have a profit of about $29,000,” Thompson said. “That does include the convention center. We incorporate that audit into this one. Actually, the bulk of the sanitation is on that. You will see there is a $40,000 loss on the convention center and a $69,000 profit on the sanitation side.”

One finding noted in the audit report concerned  budget to actual comparison.

“Anything that goes into the checking accounts and comes out is something you need to budget for,” he said. “One of the things, when you did a lot of capital expenditures, they weren’t included, but you also borrowed money to pay those. You will see on here that you did have in the total expenditures an unfavorable line.”   

According to the findings listed in the audit report, the “city did not budget sufficient funds for several departments and in total spent more than budgeted by $408,738, and the city failed to recognize loan proceeds of $329,932 as a source of funds used to finance capital equipment purchases.”

Thompson explained to council members that he has already spoken to city clerk Jennifer Freeman and mayor Dwayne Hatcher about that issue.

“Whenever you do the next budget, make sure you include everything that is cash related,” Thompson said.

Despite the loss in revenue the city had for the 2013 fiscal year, he pointed out the city is making improvements due to the city’s cash flow being up.

“With your cash increasing and your flow being better, you were actually able to get rid of some of your findings that you had in the previous year and that is when your invoices [weren’t being] paid within 30 days,” he said.

After the council meeting, Hatcher said he was happy with the audit report.

“You know, we have some issues, but they are not anything that can’t be corrected. In fact, a few of the findings we’ve already corrected,” he said. “We’re very pleased with our audit.”

Councilman Seaborn Ellzey, who chairs the council’s finance committee, said he thought the city’s financial position had improved from previous years.

“I think it’s very good. We are growing in black ink year after year, so you can’t complain about that. Improvements are up, which are obvious to the things going around; sidewalks, buildings, acquisitions, grants,” he said. “I think the city’s doing right fine.”

Read more in the print or digital Glasgow Daily Times. http://glasgowdailytimes.cnhi.newsmemory.com/

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