Is Port Orange Running Multiple Sets of Books?

runInCircle  Mayor Green,
I attached two pages that both show the General Fund Revenues for September 30, 2013.  One is from the CAFR and the other is from the September 30, 2013 financial reports that the finance department finally posted on the City web page.  When you look at these two pages, you can see that most of the numbers and budgets are totally different.  Anybody looking at this would think that Port Orange is running two sets of books.  Actually there are four.  The CAFR, detailed reports posted monthly, the summary selected monthly report that the Finance Director presents to City Council, and the annual budget.  The only way that I could tell that the detailed numbers mostly match between the CAFR and posted financial details was using a schedule that John Shelley prepared almost two years ago that included the general ledger account numbers.
Councilman Ford has repeatedly said that the budget should be able to be peeled back like an onion.  Well, we have an onion, an apple, an orange, and a grapefruit(the selected monthly summary that cannot be peeled back at all).  My personal opinion is that we can reduce the finance department staff by 25% if we just get down to one set of numbers.  Port Orange did not have any real finance reporting for almost six months after the September 30th year end.
The financial reports that we have now are so different that proper decision making would be a challenge for anyone.  If I were a city councilman, it would be impossible for me to make appropriate financial decisions for the citizens with this kind of poor financial reporting.  It is a problem with management or talent in the finance department.  Throwing more bodies at it is not the answer.  If they are running in a circles now because of poor management, it will only make the circle larger.
Thanks,
Mark Schaefer
3606 Donna Street
Port Orange, Florida 32129
386-316-1206


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One thought on “Is Port Orange Running Multiple Sets of Books?

  • April 12, 2014 at 8:33 am
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    Memo to: Greg Kisela, City Manager
    From: Wayne Saunders, Finance Director
    Subject: Response to Schaefer email
    Date: April 11, 2014
    The following is in response to Mark Schaefer’s email to Mayor Green dated April 10, 2014 and copied to all Council Members and the City Manager. Mr. Schaefer refers to the CAFR and the September 2013 financial reports posted on the City’s web site, commenting that the numbers are different and later in the email commenting that “we should just get down to one set of numbers”. We have previously explained, and I believe all Council Members understand, that the statements found in the annual CAFR combine or “rollup” several funds into a combining statement. State law requires that the statements be presented in conformity with generally accepted accounting principles (GAAP) and the CAFR meets this requirement. The financial reports that we provide on the website and monthly to the Council do not combine funds but provide individual fund balances which are more useful throughout the year. These monthly reports show the adopted annual budgets, budgets to date and actual to date numbers for individual funds, providing a current look at the City’s financial performance. This method of accounting and reporting is consistent with accepted governmental fund accounting standards and practices and is utilized by most governmental entities. I can understand Mr. Schaefer’s frustration with understanding governmental fund accounting but he does admit in his email that he could tell the numbers match. I disagree with Mr. Schaefer’s statement that the reports that we have are so different that proper decision making would be a challenge for anyone. Different types of reports are needed to meet the needs of various persons or entities utilizing the reports. While the state and entities such are bonding agencies require or prefer the format provided by the CAFR, the monthly individual fund statements are more beneficial to the Council and the public who are mostly interested in how the City is performing against the adopted budgets. Mr. Shaefer ends his email with a comment about running in circles because of poor management. This statement is clearly refuted by the recent annual audit report provided by James Moore and Company, the City’s external independent auditors. The report clearly indicates the substantial progress that has been made during the past year. The auditors stated in their presentation to the Council that more progress had been made on the prior year audit comments than they anticipated. They stated that they expected only about half of the twenty four prior year comments to be addressed but all but two had been addressed. This comment along with the fact that there were only three comments in the Schedule of Finding section of the current year’s report, the fact that the audit was completed three months earlier than the prior year audit, the fact that the auditor’s report states that the financial statements are fairly presented in conformity with GAAP, the fact that the Auditors rendered an unmodified opinion and other positive information found in the CAFR should be the basis used by Council members and the public in forming opinions on the financial operations of the City. Governmental fund accounting is difficult to understand even for those who may be familiar with non-governmental accounting and finance. My staff and I are available to assist Council Members and our residents in understanding the statements and other information provided. Do not hesitate to contact me if you have any questions of if I can be of assistance.

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