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Similar to previous years, the city of Toledo was criticized in an independent audit for problems that include overlooked regulations and poor record-keeping, but the independent auditor identified fewer problems in 2012 than in 2011, according to records obtained by The Blade.
The independent audit on Toledo’s 2012 financial statements by Clark Schaefer Hackett, a certified public accounting firm based in Cincinnati, listed 17 specific problems called “current year comments.” Last year, the firm found 19 issues. The audit report listed five findings against the city, down from nine in 2011.
Clarence Coleman, acting city finance director, said the Bell administration is taking all of the findings seriously.
“What we have done is we are in the process of implementing corrective measures and implementing internal polices and procedures that will correct the issues,” Mr. Coleman said.
“When you take a look at the 17 items, these are things the auditor observed, and we take a look at these and things that we can readily correct, we do that,” he said. “Some will require a little more time because it may require more than one variable.”
Among the 17 comments, the auditor said that a required environmental review of a project occurred after the project was completed. Issues with cash management were also found.
“We noted the city is still requesting reimbursement for expenses paid by the city in 2010 related to the [Community Development Block Grant] Entitlement Grants Cluster,” the letter from the auditing firm said. “We recommend the city perform a reconciliation of all expenses charged to the department of neighborhood grants to ensure expenses have been reimbursed in a timely manner.”
It also found that the city gave out a pay raise when it should not have.
“We noted that an employee received a pay increase in error because they were set up in the system at their old classification with their new position set up as an alternate position,” the firm’s letter said. “This caused their rates to increase when their old classification received their annual increase.”
Councilman George Sarantou, chairman of council’s finance committee, scheduled a Sept. 19 meeting to examine the audit documents and hear the Bell administration’s response.
“There are three items that pop out to me on the management letter,” Mr. Sarantou said. “Whoever is preparing to pay the bills is not reading them carefully. For every $100,000, we could save $500, and clearly whoever is preparing these is not reading invoices properly.”
The auditing firm said: “We noted an invoice with 0.5 percent discount if paid within 20 days was paid within the term specified but the full amount was paid. Upon the City’s review of the vendor’s history, they also qualified for and did not take the 0.5 percent discount on another invoice.”
The city has also not performed an inventory of capital assets recently, the audit said. “This needs to happen,” Mr. Sarantou said. “This is how you lose things.”
The audit also found that unallowable costs for some employee salaries may have been charged to federal programs “due to the lack of tracking actual time instead of budgeted.”
The 2011 audit found that the city had not performed an inventory of its capital assets since 2009 when its current software package was implemented; that the city lacked a formal written policy for use of city credit cards; tax department employees could access and could alter their own tax records, and that a bonded indebtedness report due for the previous fiscal year was a month late.