City of Albany’s Fiscal Year 2013 audit report a good-news, bad-news mix

CPA firm says audit report for Albany has no findings or compliance violations

Ward VI Albany City Commissioner Tommy Postell challenged an audit report presented to the commission at its work session Tuesday morning. (File photo)

Ward VI Albany City Commissioner Tommy Postell challenged an audit report presented to the commission at its work session Tuesday morning. (File photo)

ALBANY — Meredith Lipson shared CPA firm Mauldin & Jenkins’ “audit agenda” with Albany city commissioners at their work session Tuesday morning. But not without a fight.

Before Lipson could start her presentation on the audit her firm had completed for the city for Fiscal Year 2013, Ward VI Commissioner Tommie Postell challenged the presentation, calling for a vote to table the discussion until “you bring a complete report with all the numbers.” Lipson had informed the commission that the audit agenda did not include the entire audit prepared by her firm.

“This partial stuff won’t cut it with me,” Postell said before the board voted 4-2 to reject his request to table the discussion. “To me this is meaningless; it’s incomplete information. I’d rather postpone this discussion until you bring us a complete report.

“If you don’t have a record of the actual audit, why did you even bring us this? This to me is mumbo-jumbo without the actual numbers.”

Postell later told Lipson his comment “was not meant to be negative,” but added, “I can’t comprehend this information without the mathematics. Until I see the numbers, this is hypothetical.”

Lipson had explained that the report sought by Postell was being prepared by the city’s Finance Department, not as part of Mauldin & Jenkins’ contractual obligation. “I would expect that with the changeover in that department (former Finance Director Kris Newton retired) and the reorganization (JoEllen Brophy was recently named CFO in charge of all city finances), they haven’t had time to get you the printed copy of our final report,” Lipson said.

“When they’ve finished and you’ve had time to look it over,” she said, “I’d be glad to come back and answer any questions you might have.”

Lipson’s report included something of a good-news, bad-news mix. She said the city had gotten an “unmodified or clean” opinion with “no findings or compliance violations.” Conversely, Lipson noted that transfers to the city from the Water, Gas & Light Commission were down $2.5 million compared to FY 2012.

Lipson said all city departments had expenditures for FY 2013 that came in under their budgeted amounts, including $400,000 below for Finance, $380,000 for Park Development and Management, $350,000 for Human Resources and $270,000 for Information Technology.

“My hat’s off to those departments especially,” Lipson said.

Lipson said the city’s fund balance decreased from FY 2012 by $7,777,203, but that total is misleading.

“While actual expenditures of the general fund were under budget by approximately $4 million,” she said, “the general fund transferred approximately $9.2 million to the Job Investment Fund (created from WG&L credit transfers) and approximately $2.1 million to the Capital Improvement Fund, resulting in a decrease to the fund balance of $7,777,203.”

Asked by Ward IV Commissioner Roger Marietta if the city’c cash flow was “healthy,” Lipson said, “Cash flow in the city is stable; there are no issues at all. Unfortunately, the public is not often aware of that fact. Of course, any city is always one major disaster away from economic catastrophe, so you must always stay on top of things.”

Lipson warned the commission that new Government Accounting Standards Board pronouncements change the way pension plans are reported, meaning that governments must now list their long-term obligation for pension benefits as a liability. Under the new guidelines, the city’s unfunded actuarial liability for its pension plan would reduce its net equity by $45.2 million.

City Public Works Director Phil Roberson, who chairs the city’s Pension Committee, said the news is not cause for panic.

“We’re at 70 percent funding of total liability, which is where we should be as a government that does not fully fund its pension plan,” Roberson said. “We’re well within the guidelines of where we need to be.”

Asked about the new listing as a net liability, City Manager James Taylor said, “Nothing can be done to circumvent putting that $45 million on our liabilities. The question no one can answer is, how will that impact us? That liability has been there, it’s nothing new. It’s going to be there unless we hit the lottery.”

Also at Tuesday’s meeting, the commission gave tentative approval to a request to accept the donation of sports equipment given to the Albany Parks and Recreation Department by the NFL’s Atlanta Falcons. Interim Parks and Rec Director Darrell Smith said the department had applied for the donations that would be used in support of the Special Olympics.

Commissioners also gave approval for Human Resources Director Henry Cohen to rewrite the city’s drug-testing policy. The new policy, which City Attorney Nathan Davis said is based on court cases, excludes random testing.