January 14, 2019
By: Dwayne Page
The City of Smithville gets good marks in it’s latest financial audit report.
John Poole, Hendersonville CPA, who performed the annual audit for the city, addressed the mayor and aldermen last Monday night.
Poole said there were no major deficiencies. “The purpose of our audit is to make sure the monies we are supposed to be getting we get from property taxes, sales taxes, utility bills and other charges and that those monies are handled according to state guidelines and city policies. We then must send our findings to the state,” said Poole
“As your auditor we didn’t see anything involving what that we call revenue cycles, monies coming in, that we were concerned about at all. The city does a good job in managing those. When you have as many utility customers as you do you are obviously going to have some on a month to month who don’t pay but the city does a good job in monitoring that and making cutoffs when appropriate. As auditors we don’t have any concerns. We think things are being done the way this board and the citizens expect them to be done, “ Poole continued.
“We spent most of our time looking at the monies the city spends, the things that this board authorizes the department heads to spend. We look to see if funds are being spent on city business. We didn’t run across anything that we thought was not appropriate for the city of Smithville. We make sure we are following state guidelines when it comes to purchasing and following our city procedures when grants are involved making sure purchases were acceptable within the guidelines. We didn’t see anything that caused us any concerns,” Poole said.
While the water and sewer fund shows a small surplus there would have been a slight deficit had it not been for grants the city has received. The general fund also spent more than it took in but Poole said there were reasons for it and he isn’t concerned.
“In the water and sewer funds we had a net in change position or profit and loss of $55,000 but it was a positive number because of grants received. Of course we don’t get those grants every year. If we had not had those grants we would have had a very small deficit in the water and sewer fund but from the state standpoint this year it is a surplus of $55,000. While we met the state guidelines this year we want to be very aware and look at our rate structure for 2019 so we ensure we are doing what the state requires us to do to make sure you have a surplus,” said Poole.
The state requires municipal water and sewer systems to be financially self supporting. If a utility runs in the red for two years in a row the state can force the city to raise rates
“In the general fund during 2018 we spent $130,000 more than we took in but you bought almost three quarters of a million dollars in equipment. We won’t do that every year,” Poole added.
Because of the city’s healthy reserves, Poole said the city is in good financial condition.
In my opinion the city’s finances are in really good shape. Cash and cash equivalents in the general fund had $3.2 million dollars plus another half million dollars in cds. With almost $4 million in reserve you luckily have a little cushion. If catastrophic things were to happen, the city has really good reserves that it could use to do the things it wanted to do,” Poole said.