Bear Creek 2018 audit shows many discrepancies

BEAR CREEK - The town of Bear Creek’s long-awaited audit report for 2018, that has been on hold several months after town officials made a request to their previous auditor, was finally shared with the town council and public by newly hired CPA Don Wallace, who reported numerous financial discrepancies.
The council and public were all ears, as Wallace reported the overall status of the town’s finances for the 2018 fiscal year, as well as his summary of findings and judgments.
The council officially reviewed its annual audit for the year ending Sept. 30, 2018, at their Nov. 28 regular council meeting, when Wallace addressed the findings.
After the reading of the findings, Wallace advised the council to accept the audit, subject to any corrections or revisions
Attorney Cole Christopher advised the council he had spoken with the Alabama League of Municipalities and the council did not have to accept the audit.
Wallace returned that most councils vote to accept the audit pending any corrections or revisions. 
Attorney Shane Cook, who was also present at the meeting, noted the council could vote to approve the audit pending any changes that may be found.
Mayor Tammie Batchelor then asked the council for a motion to accept the audit, so they could move forward with the town’s financing.
After this request, no immediate action was taken from council members, who sat in silence looking over the figures for around a minute.
After the odd pause, Mayor Batchelor asked Cook or Christopher to explain to council members the procedure they need to follow.
Cook recommended the council vote to accept the audit as presented pending any changes or adjustments.
Council member Jimmy Preston then made a motion to approve the audit pending any changes. Heath Heatherly seconded the motion, and all voted in favor including Preston, Heatherly, Chris Gillum and James Loden.
Mayor Batchelor asked council members if they had any questions.
“I don’t have any that I want to address right now,” Loden responded. “I feel I may have some later.”
Loden added he would like to sit down and discuss the audit.
“That or email you the questions when we look through it,” Gillum added.
Findings from a previous administration, no charges filed
It should be noted that the series of discrepancies from fiscal year 2018 occurred during a previous administration, when Connie Morrison was mayor and Ava McCurley was town clerk.
Members of the previous administration council included Daniel Green, Chris Hyde, Jimmy Preston, Chris Gillum and James Loden.
Morrison resigned as mayor in 2018, just a few months after McCurley retired as clerk. Hyde  resigned from the council with Green resigning earlier this year. 
There is no direct link between their resignations/retirement and the audit findings.
There have been no charges filed of any deliberate wrongdoing. 
AG’s Office Conducting 
Ongoing Investigation
Mayor Batchelor, after the audit findings were made public, was in contact with the Alabama Attorney General’s office which is conducting an ongoing investigation into the town.
The AG’s office, Mayor Tammie Batchelor noted, had requested the audit report after it was made public, to have in their ongoing investigation.
“They have not commented to where there is any charges, any guilty individuals or anything,” Batchelor pointed out. 
Vance Terminated as Town Auditor
The present council, however, is having to deal with  lack of paper trails and information, when doing research in order to present figures to their past auditor Ben Vance.
The town has also the past few months had to deal with delays from their now-former auditor Vance, Batchelor pointed out.
“We’ve been trying since the first of December (2018),” Batchelor pointed out. “The first time I met with Ben Vance would have been the first week in December after I was sworn in as mayor on Nov. 5.
“He walked out of there with boxes of information, what information we had,” Batchelor added. “We waited and waited and waited, and he has repeatedly asked for copies of the same stuff that he had, the original documents...only for him to never complete the audit and mail boxes, after I demanded for the boxes to be returned.”
The mayor took action through letter to terminate the town’s services with Vance, after she discussed the matter with the council and the issue had been discussed openly at council meetings, she said.
The letter addressed to Vance and dated Oct. 18, read, “The purpose of this letter is to inform you that your employment to provide the 2018 financial audit for the town of Bear Creek is being terminated immediately.
“This decision is final and not reversible. Your services are being terminated because of your failure to complete the 2018 audit in a timely and efficient manner,” the letter signed by Batchelor, continued to read. “Furthermore, the failure to complete the audit in a timely manner has caused financial harm to the town of Bear Creek.”
The letter also requested Vance return all audit documents, work products as well as all original records of the town immediately.
The failure of the town to receive an audit in a timely manner also resulted in the town not receiving a $1.5 million USDA grant to revamp the town’s water system. It had also hindered the town from being able to restructure and refinance the loans in efforts of lowing loan payments, pay past due bills in which the present council continued to receive late penalties from the previous administration, Mayor Batchelor stated.
The town was able to secure Wallace as their auditor before they dismissed Vance, Batchelor said.
“It didn’t matter how much the previous administration was paying, there were so many penalties and interest that kept accruing to the point...you figure $5,000 a month with 72 months. That’s $350,000,” Batchelor said as an example. “The town could never get caught up.”
Wallace Cites Discrepancies
Wallace during the audit report, told the mayor, council and public, “I felt we got to go over a lot of things we’ve been working with your staff on and your clerk.
“The first thing, you want to get your books in order for your system,” Wallace noted. “These are your books, and if you do not have folks that can keep up with them accurately, then you are just running behind.”
Wallace noted it was not up to the auditor to tell a town how they are to manage or operate.
“That is something you are supposed to manage ongoing,” Wallace stated. “We come in behind and check those things, but from an operating standpoint, that’s an internal  thing.”
Wallace said town officials worked hard in helping him compile the figures for the audit.
A complete copy of the town’s  audit report from FY 2018 is available for public inspection during normal business hours at the town hall.
A summary of revenues for FY 2018 showed taxes at $359,406; licenses and permits $77,510; intergovernmental support $100,900; water and sanitation services $641,643; park and campground $218,286 and $40,039 in other miscellaneous expense for a total of $1,437,784 in revenues.
Expenses however, outweigh revenues by $67,756.
Total expenses were listed at $1,505,540, including $177,454 for general and administration; $166,412 for street and sanitation; $253,937 for police department; $144,576 for culture and recreation; $52,863 in fire protection; $14,028 in industrial and $696,270 for water department.
Assets total $2,374,778, compared to liabilities at $1,499,528 and net assets of $875,250, according to an audit summary report provided by Wallace.