Missing records alarm auditors
Oct. 13, 2016 PLYMOUTH EAGLE.
Plymouth Michigan News
According to independent auditor Plante Moran, improprieties in accounting practices and handling of drug forfeiture funds in Plymouth Township are not the only financial problems facing the municipality.
Representatives from Plante Moran, the accounting and auditing firm employed by the township, say they cannot comply with the Michigan Department of Treasury requirements and complete the township audit, due June 31, due to the lack of cooperation from Township Treasurer Ron Edwards and Supervisor Shannon Price.
As township supervisor, Price is considered the chief administrative officer of the municipality.
Both Price and Edwards were defeated in the primary election Aug. 2.
Fieldwork for the audit usually begins in May and is completed by the following June, according to the auditing firm which specializes in municipal finance. This year, however, auditors say they can’t proceed with the state-required audit for the fiscal year ended Dec. 31, 2015, due to the failure of Edwards and Price to provide the financial reports and records necessary.
In a nine-page list compiled by Plante Moran, auditors highlighted the critical items mandatory for completion of the report with the majority of those listed due from Edwards.
Key categories listed as requiring further accounting information were segregated for Cash, Customer Receivables, Capital Assets, Accounts Payable, Accrued Liabilities, Revenue Sharing, Property Taxes, Self Insurance and Miscellaneous. Some of the significant yellow-highlighted missing records included:
Request for “copy(s) of bank reconciliations for all bank accounts through Dec. 31, 2015, including lists of outstanding checks…
“2015 Winter Tax collection schedule…
“Schedule(s) detailing healthcare benefits paid for retirees…
“Schedule of accumulated depreciation…for capital assets
“Schedule of all retirements prior to Dec. 31, 2015…
“…(Prepare a) schedule of all federal grants…”
According to state law, municipal audit reports along with any written correspondence, recommendations or deficiencies prepared by the CPA are required to be filed within six months of the end of the fiscal year.
The Audit Manual for Local Units of Government in Michigan states the chief administrative officer, in this case Price, may request an extension for the filing of the audit from the state treasurer stating that the audit is in progress and providing a date for the expected audit completion, with an explanation of the existence of any extraordinary circumstance beyond their control demonstrating reasons the audit cannot be completed and filed in reasonable and timely manner. According to individuals close to the situation, Price has not completed any such request.
According compliance guidelines issued by the office of the state treasurer, the contracted auditors must have a reasonable assurance that the financial statements are “free of material misstatements arising from illegal acts that have a direct and material effect on the determination of financial statement amounts.
“The request for an extension will be denied absent the existence of an extraordinary circumstance beyond the control of the local unit.”
In December 2015, Plante Moran auditors also found problems with the audit preparation after township officials finally submitted the required data five months past the June 30 deadline.
In a letter to township officials dated Dec. 1, 2014 auditors Martin J. Olejnik and Kari L. Shea from Plante Moran said that while there were no significant material weaknesses in the township accounting practices, they encountered considerable delay in receiving information and necessary documents. They also urged officials to submit all year-end journal entries and audit schedules by May 1 of each year to meet the filing requirement. Noting internal flaws in accounting practices, the auditors said there was “…an opportunity for the Township to further strengthen internal control to increase operating efficiencies.”
During a public discussion of the audit at that time, Edwards claimed, “We wouldn’t have this problem if it hadn’t been for the City of Plymouth.”
Plante Moran is required, as part of the audit, to certify township compliance with recognized Michigan Department of Treasury accepted government auditing standards.