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No controls for finances, auditor says
Written by Mark Lineberger   
Wednesday, 23 January 2008 13:37

Camp Verde lacks sufficient checks and balances over its finances, according to a recent auditor’s report.

After the recent forced resignation of town Finance Director Dane Bullard, Phoenix-based Lisa Lumbard & Associates took a good look at how Camp Verde conducts its business.

In short, the firm found that the town has little oversight over who is doing what with its money.

In many cases, the person responsible for taking money is the same person responsible for balancing the books. There isn’t an official investment policy in place, only a draft that was never formally adopted, and too few people are looking after the town’s money.

The report also revealed that the town has 54 credit cards through 12 different companies, with credit lines as high as $15,000.

Some town departments have been using the cards to pay for operating expenses, the report states, a violation of the town’s policies and procedures.

Bullard was also the only person previously authorized to make payments and withdrawals from accounts, including an account worth more than $270,000. No records of income, interest, dividends or ledger reconciliations could be found, the report states.

Blank checks were also being left out in plain view of the public, the report states; the town has since put its checks into a safe.

Presently, the town requires purchase orders to be filled out for any expenditure over $100. Lumbard recommends that the town raise that number to something more efficient.

Often, the policy results in added expense from filling out paper work to, in some cases, double payments for services while the paper work is processed.

Lumbard said that while she realized the town’s staff was small, every effort should be taken to segregate financial duties. The town’s staff has been eager and willing to put such safeguards in place, Lumbard said, and her auditors recommend that town employees cross-train for different jobs to ensure one person isn’t left with total responsibility over the town’s finances.

The problems are severe enough for the town to suspend its search for a new finance director.

Town Manager Michael Scannell said that, after
interviewing candidates to replace Bullard, he feels it’s best to get reliable policies in place before bringing in someone new, at least for the rest of this fiscal year.

The report also verified that the town’s hiring policies were not followed when Camp Verde Sanitary District employees were put on the town’s payroll after an agreement signed last May.

While Lumbard found that the sanitary district approved the transfer, there was no record of the town ever giving official consent.

In the end, Lumbard said the town should make sure there are more fingerprints on every transaction it makes; having one person handle everything opens the door to fraud.

“It seems we got pretty sloppy in the way we did business,” Councilwoman Norma Garrison said.

Mayor Tony Gioia said he wanted Scannell, who has an extensive background in public finance, to look at the auditor’s report and devise a plan to fix Camp Verde’s problems with financial oversight.

“We need to stabilize things,” Scannell said. “We need to build a foundation that’s solid so we can go forward.”

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