Spring City audit raises eight issues, all relatively minor
By Rhett Wilkinson
SPRING CITY—An auditor raised eight issues, none particularly serious, after examining Spring City finances and operations during the 2019-20 fiscal year.
Greg Ogden, an accountant from Springville, presented the findings at the Thursday, Dec. 3 council meeting.
The first finding showed that the city exceeded its budget in five funds. Ogden said under Utah law, expenditures in a fund should not exceed the fund budget. The electric fund was over by $91,000. However, the city as a whole ran well under budget.
Ogden told the council to “budget enough to ensure that no fund budget is exceeded.”
In the second finding, one of the two city council meeting agendas Ogden tested was published the morning of the meeting when it should have been posted at least 24 hours in advance of any meeting that is held. That was too late, he said.
In a third finding, Ogden observed that minutes of a city council meeting were posted to the Utah Public Notice Website two months after being approved. The minutes are required by law to be posted on the site within three days after being approved, Ogden said.
In the fourth finding, Ogden said there needs to be a roll call vote for the city council to go into closed session. No such vote was noted in minutes showing the council had gone into closed session, Ogden said.
Spring City Mayor Cynthia DeGrey asked if the vote needed to take place before the council goes into closed session.
“Correct,” Ogden said.
In the fifth finding, Ogden said that each member of the council must attend a Utah Open and Public Meetings training at least once per year.
“You can do that online, you can do that as a group, you can have somebody, like David Church (attorney with the Utah League of Cities and Towns) come in and teach that. There are a number of ways to comply with that, but it does need to happen every single year,” Ogden said.
DeGrey said that open meeting trainings were conducted at “some point last year” by Councilman Chris Anderson, who is an attorney.
Ogden said he thought the training had occurred one month before the end of 2018-19 fiscal year, which meant no training had occurred during the fiscal year ending in June 2020.
Later in the meeting, DeGrey asked the council to complete the training by the next city council meeting on Jan. 7. She emailed it a link that goes to an open-and-public-meetings training at the Utah state auditor’s office website. DeGrey said she had completed it.
In the sixth finding, Ogden said city staff should give financial reports to the council, with balance sheets and sheets showing revenues and expenditures, both budgeted and actual. The reports should be provided either monthly or quarterly during the year, he said.
This is so the council can “look at the budget compared to what was actually spent,” Ogden said.
Later in the meeting, DeGrey said the council will be receiving monthly financial reports at their email addresses.
In the seventh finding, Ogden said the city was supposed to do a fraud risk assessment and presented a report to the city council by June 30 describing what policies and procedures are in place and being followed.
The treasurer and mayor were then supposed to certify the assessment. If it’s submitted by Dec. 31, “you probably won’t hear from the state auditor’s office,” Ogden said.
In the eighth finding, Ogden said the city’s general fund balance, essentially its budget surplus, exceeded the limit set by the state of Utah. The limit is 25 percent of your total revenues for the year.
“It’s just a matter of transferring that money, any excess that you might have, into the capital projects fund or finding some way to spend it down so that you don’t exceed the 25 percent requirement that’s allowed,” Ogden said.
DeGrey expressed appreciation for Ogden and the council’s relationship with him, saying she was grateful for him answering what “may what seem are dumb questions for you.”
“One of the biggest indicators to me of a city that wants to get things right is the willingness to call me,” Ogden said.
“I appreciate when my clients call.”
“I think all of these (findings) are pretty easy to fix,” Ogden told the Sanpete Messenger. He said that the city has a “brand new” treasurer, recorder and mayor, “so they didn’t know all the details that they were supposed to comply with.”
“Usually you’ll have one change [between the treasurer, recorder and mayor] during the year, but to have three at once was too much for them to keep up with the requirements that a city is supposed to be following,” Ogden said.
One city in the past had 20 findings, some of which were serious, but Spring City’s eight findings are all pretty minor, Ogden said.