Port Orange Bond Payments Not Recorded

balanceSheetMayor Green,
I brought up the point that the Finance Department’s Monthly Financial Report to City Council is very incomplete and inaccurate at the last City Council meeting.  One point that I referenced is that the 2004 Bond Payment for 2013 and 2014 is still not fully recorded in the General Ledger and Balance Sheet.  I attached balance sheet pages 108 for the September 30, 2013 and May 31, 2014.  You can see from these pages that the principal balance on City Bonds has not decreased one penny even though the payments were supposedly made on October 1, 2013 and April 1, 2014.  This is only one ofmany similar accounts and issues.
I also included the September 30, 2013 general ledger page 662.  If you look at the upper right hand corner, you can see that this is period 13.  Period 12 is totally missing from the financial reports and general ledgers that are posted on line.  Period 13 has hundreds of adjustments for millions of dollars.  I see adjustments for September 30, 2013 made in late January 2014.  The CPA auditors were very critical of the City for not getting the books closed and ready for the audit last year.  I took this very personally because, as a member of the Audit and Budget Board, we were blind sided by these comments.  We had been assured that the audit schedule was being met and there were no real issues that would cause such comments by the CPA auditors.  We seem to be on the same exact course for problems this year by not getting the proper transactions recorded monthly.
Does what I am seeing mean that the Finance Department needs more staff?  I contend the exact opposite.  The City must be spending hundreds or even a couple thousand hours reconciling the books and accounts each year.  Properly recording transactions when they occur and making the appropriate entries monthly would save these hundreds and thousands of hours.  The result may be reducing staff or reallocating staff to more productive purposes.
The Audit and Budget committee passed a resolution recommending that the books be kept open for 15 to 20 days each month so that the bank statement can be reconciled and all of the adjustments made.  Most larger businesses do just that.  To date, this recommendation seems to be ignored by the finance department.  City Council has tasked the Audit and Budget Board with improving the City financial reporting.  I prefer not to be bringing this issue directly to the Mayor and City Council.  I think it should have been handled by the Finance Department management.  Since we are now three-fourths of the way through the year, and appear to be on the same course as last year,  I do not feel that I have much choice but to ask for City Council involvement in this issue of gettingaccurate monthly financial reports.
Mark Schaefer
3606 Donna Street
Port Orange, Florida 32129

2013 Balance Sheet

2014 Balance Sheet

General Ledger

This in response to Mark Schaefer’s June 27, 2014 email.
The Monthly Financial Reports presented to the City Council are interim Revenue and Expense reports that highlight the financial activity for the major funds as stated in the first paragraph of the report and accurately reports the revenues and expenses for the five major funds.  Mr. Shaefer is referring in his memo to balance sheet accounts outside of the five major funds that are not a part of the monthly report presented to the Council.
In response to Mr. Schaefer’s comments regarding the recording of the 2004 Bond payments; payments are initially recorded in the Debt Service Fund at the time of payment in compliance with Government Accounting Standards .  A closing entry then adjusts the liability account at year end.  The reduction of the number of year end adjustments has previously been discussed will be accomplished as we become better staffed and most certainly if a new financial system is approved.
As for his Period 13 comment;  period 13 is a commonly used tool used to record necessary  year-end adjustments.  It has been the practice  not to publish or post Period 12 (ending September 30) to avoid an assumption being made that the period 12 numbers are the final balances for the fiscal year.
With regard to Mr. Schaefer’s comment that the Audit and Budget Board was blind sided by the auditor’s comment that the books were not ready for last year’s audit;  I informed the Audit and Budget committee at their December meeting that we were two weeks behind schedule.
In response to the last comment regarding A & B Board’s recommendation to keep the books open longer each month:  I previously responded to the board that we could consider this once we filled the position responsible for the reconciliations.  That position was filled at the end of May and we will consider the impacts and report back to the A & B Committee. Please let me know if you need additional information.
Wayne Saunders, ICMA-CM
Finance Director
City of Port Orange
1000 City Center Circle
Port Orange, FL 32129


2 thoughts on “Port Orange Bond Payments Not Recorded

  • June 27, 2014 at 9:33 pm

    It all sounds very complicated to me. Reading the Finance Director’s reply I at times thought “This is and this isn’t”.
    I wonder how all these different ways of accounting came to being. Surely not as the result of a “big bang”. The different categories, like the 700 different categories of water rates in the city of Port Orange surely must be the result of intelligent design.
    But after all is said and not done, “What difference does it make”.

  • June 28, 2014 at 11:39 am

    Hi Mark,
    I’ve been listening to you and some other members of the Audit and Budget Board point out similar problems with the sorry state of the Finance Department for some time now. I’ve also been listening to the Finance Director provide the same old mushy-headed “answers” to your complaints for some time now. The complaints stay the same, the answers stay the same, in other words the problems stay the same. Maybe now that the Finance Director’s main FCCMA/ICCMA, Range-ridin’, MIT-hirin’ benefactor is on the way out, he’ll have to make some changes. Fat chance. Unfortunately, the rest of the City provides too much of a smokescreen to hide behind for him to do that.
    A Finance Department that can’t balance a checkbook can easily get lost in the company of a Public Works Department that can’t mow the grass, a Public Utilities Department that can’t install a water meter, a Community Development Department gives us a 4-lane road with a 25-mile-per-hour speed limit, and, FINALLY a City Council that is gearing up to subsidize Buddy LaCour’s 17-story Condabominations with over 10 million dollars of tax money! The City has plenty of people capable of balancing checkbooks, installing water meters, etc. etc. so the problem is not with the employees, it’s with management. It’s always with management. And management will finally have to answer to the City Council.
    And that is the TRULY depressing thought! Yep–those five guys that are working so hard to slide money out of my wallet and into the pockets of Buddy LaCour are the ones in charge of the whole ball of wax? I might just go ahead and hang myself right now if it weren’t for our one ace in the hole. The City Council ultimately has to answer to the PEOPLE of Port Orange and I truly believe that the people will get it right. At 4:45 this Monday afternoon we’ll have a chance to bring a little sanity back to the City Council and turn them away from government for the developer and back to government for the people. Hoping to see lots of concerned people at City Hall on Monday.
    Mike Gardner
    618 Ruth St
    Port Orange, FL 32127


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