LOCKPORT – Mayor Anne E. McCaffrey intends to appoint some financial and business experts to the city’s new audit committee, hoping that outside eyes will keep the city from further financial woes.
“The goal is to have greater scrutiny of the audit process,” McCaffrey said last week. The city is required to implement some financial reforms recommended in the various audits issued by the State Comptroller’s Office. The audits revealed that the city’s financial records were a mess and that its former outside audit firm, Amato Fox, failed to detect that the city was practically out of money at the end of 2012.
City Treasurer Michael E. White has blamed the bookkeeping problem on a staff shortage. Amato Fox has said it detected difficulties, but there was no follow-through to correct the problems.
One of the state’s directives was a call for an audit committee with expertise and teeth. The Common Council voted last week to form one, and McCaffrey said she hopes to have the members chosen in time for the first Council meeting of 2015 on Jan. 7.
“The goal is to prevent the city from ever getting into financial trouble again,” she said.
The rules the Council adopted bar any city employees or their immediate family members from serving on the audit committee. Also, the members aren’t allowed to have any business relationship with the city.
The committee will comprise at least three outsiders, and its duties will begin with hiring the city’s public accounting firm. The committee will have the power to investigate any suspected fraud and turn its findings over to outside agencies.
It also will be able to hire a financial expert to act as a consultant, at the city’s expense. The committee must meet at least twice a year, and it must meet with the city’s outside auditing firm at least once a year to review its report and the city’s financial statements.
Implementing another state recommendation, the Council voted last week to require competitive bidding for the outside auditing firm every three years. The city left Amato Fox, formerly Fox & Co., in place for 17 years without bidding, until the Council replaced Amato Fox with the Bonadio Group in 2013.
Also last week, the Council approved the job specifications and a list of duties for the new $75,000-a-year director of finance position. McCaffrey said she intends to fill the post in January.
The finance director will be assigned many jobs, including some that used to be White’s, like preparing weekly and monthly financial reports, keeping records of fiscal matters, and performing bank reconciliations.
The audits by the state and Bonadio said reconciliations weren’t done in a timely fashion for years.
The director also will oversee the processing of the payroll, review and approve the payment of bills, coordinate city borrowing and keep records of all debt.
The city will borrow $4.2 million on Dec. 30 to carry out the emergency payment of accumulated deficits, a measure approved by the State Legislature and Gov. Andrew M. Cuomo after the Comptroller’s Office recommended it.
White is an elected official whose term expires at the end of 2015. There has been talk about making the job appointive, a change the Council could make in July, according to the City Charter.