Wednesday, December 7, 2016

Council honors departing Roller and Craig, reviews annual audit of city's finances

By Emily Priddy
University of Kentucky School of Journalism and Media

The Midway City Council Monday evening honored Dan Roller and Steven Craig as they leave the council, reviewed a recent audit of the city, and confirmed the goals and objectives submitted by the planning commission.

Council Members Dan Roller and Steven Craig, left and right,
posed with Mayor Grayson Vandegrift after their last meeting
as members. (Midway Messenger photo by Kaitlyn Taylor)
Roller has been elected to the council three times, serving since 2011. This year, he decided to not seek re-election. “Dan has been the driving force on the council in updating the city of Midway’s property maintenance code,” Vandegrift said, reading from a proclamation he had written.  Roller served on the Property Maintenance Code Committee during his time on the council, working to resolve issues with blighted properties. Continuing his proclamation, Vandegrift said, “Many formerly blighted properties have been rebuilt as a result of Dan Roller’s work.”

Vandegrift added: “Dan put significant time and energy into making Midway the eighth city in Kentucky to adopt a fairness ordinance.” The June 2015 ordinance prohibits businesses that have more than seven employees from discriminating on the basis of sexual orientation or gender identity. In recognition of his service, Vandegrift declared Dec. 31 “Dan Roller Day.” This will be his last day on the council.

Craig, the other council member honored at Monday’s meeting, was one of two members who opposed the fairness ordinance. The other was Libby Warfield. After serving one two-year term, he ran seventh in last month’s election for six council seats.

Vandegrift praised Craig in his proclamation for using “his considerable skills and talents to improve Midway’s city property.” Craig has worked at Georgetown College for the last 20 years and also works for the Woodford County Fire Department.

Vandegrift credited Craig for the sidewalk in front of the Midway Veterans Memorial in the cemetery. Craig was on the council committee dedicated to sidewalks that created the city’s first sidewalk cost-sharing program. Vandegrift declared December 30 “Steven Craig Day.”

The council passed a resolution confirming the goals and objectives for the comprehensive plan adopted by the Versailles-Midway-Woodford County Planning and Zoning Commission. The council had passed a similar motion at its last meeting, but Planning director Pattie Wilson asked the council to adopt a formal resolution.

The goals and objectives had long been a point of contention because one goal specified an objective that included a proposed northwest Versailles bypass. If built, the bypass would funnel traffic from Versailles onto Midway Road, U.S. 62.

The specific reference to the bypass was removed as part of an amendment by a committee of representatives from the governing bodies, appointed so that all would be in agreement.

The resolution passed unanimously. Council Member Sara Hicks, who voted against last month’s motion, was not present Monday evening.

While the resolution didn’t plow new ground, it gave Vandegrift an opportunity to comment on planning and zoning issues.

“I think the whole document is a compromise . . . There are questions that we need to not let drop,” Vandegrift said, alluding to relations between Midway and the rest of Woodford County. Midway’s sole representative on the commission, Rich Schein, was left off of the subcommittee that drafted the goals and objectives.

Versailles Mayor Brian Traugott has proposed giving Midway another seat on the commission, and the Woodford County Economic Development Authority, in return for Midway paying more to fund the planning function and EDA.

Traugott’s proposal was a reaction to tension that arose at the last meeting between Vandegrift and EDA Chairman John Soper over Soper’s proposal to raise Midway’s payment to EDA to finance a contract for Soper, who already has such a contract with Versailles. Midway also only has one representative on the seven-member EDA board.

Vandegrift told the Messenger that he has scheduled discussion of the proposal for Jan. 3, the next council meeting, when new members Steve Simoff and John McDaniel will take office.

Audit finds a weakness and a deficiency

The council also reviewed a financial statement provided by Smith & Co. CPAs. The statement said the city's finances have a material weakness and a significant deficiency. The firm described the material weakness as the city not having internal control “over financial reporting that would allow it to prevent, detect, and correct a significant misstatement in its financial statements.”

The statement said, “The city has financial restraints that prevent the hiring of accounting personnel” such as certified public accountants. It described a similar cause for the significant deficiency.

In describing the deficiency, the financial statement said “There was not adequate segregation of duties over receipts, disbursements, and reconciliations at City Hall. The clerk/treasurer accepts cash receipts and also records the amounts into the accounting system.”

The recommendations suggested by the firm were: “Mail should be opened by an employee not responsible for accounting, such as the assistant clerk or the mayor. Cash receipts could be recorded in a cash receipts journal and the deposit prepared by this person. The cash receipts journal, supplemented by remittance advices, could be forwarded to the clerk/treasurer for postings to the general ledger and detail customer accounts. Cash receipts should be deposited intact daily. Holding receipts for a weekly deposit exposes the city to loss.

“Bank statements, canceled checks, and appropriate advices should be received by someone other employees maintaining cash records. Such items could be periodically reviewed prior to turning them over for reconciliation. Unusual items noted during the review should be investigated promptly. Signed checks should be also mailed without allowing them to be returned to the employee responsible for accounts payable.

“The mayor should review supporting documents for normal recurring disbursements (not usually reviewed) on a spot-check basis. Non-routine testing would aid in ensuring compliance with city policy for all disbursements.”

Vandegrift told Smith & Co. accountant Jason Strange that he actually does such a review when the city issues checks, twice a month. Strange said the statement was referring to corrections in the ledger, which Vandegrift said he does not check routinely.

The audit statement also said, “Journal entries should be approved by an employee other than the one who prepared the entry. Bank reconciliations should be reviewed by someone not responsible for entries in the receipts and disbursements records. Inasmuch as this is difficult because of the small number of office employees, we recommend that test reconciliations be made from time to time by one of the council members. In addition, he or she should review, approve, and sign the bank reconciliations to document the approval.”

Strange said both findings were common for cities similar in size to Midway. “The second finding is very common for local governments and cities of smaller sizes . . . it’s related to segregation of duties,” he said.

Warfield, the only council member who asked questions about the audit, told Strange, "I take from your comments that you're not overly concerned about it."

“I wouldn’t say I’m not concerned,” Strange said. “They’re common.”

Warfield said of Strange’s staffing recommendations, “I can see the benefits to that.”

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