THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, October 12, 1995 TAG: 9510120369
SECTION: LOCAL PAGE: B5 EDITION: FINAL
SOURCE: BY KAREN JOLLY DAVIS, STAFF WRITER
DATELINE: CAPE CHARLES LENGTH: Medium: 69 lines
When a roofing contractor complained last month that Cape Charles wasn't paying its bills, Town Council members started looking more closely at their monthly financial reports.
Where was the $69,000 that developer Brown & Root Inc. gave the town to fix the old school roof? The Houston company has plans for a retirement and recreational community here.
Why had the Police Department spent $16,000 or more on a new office without council approval?
What's the deal with $135,000 in certificates of deposit that were cashed and added to the water and sewer revenues, also without the knowledge of the council?
``We should at least be able to know if we approve expenses, that they can be paid and not have the checking account overdrawn,'' said Vice Mayor Libby Thomas at a council meeting on Tuesday night.
The Town Council voted for an immediate special audit of the town's financial records. A regular yearly audit had begun that morning, but council members said they were willing to spend an extra $5,000 to get a quicker, more detailed report.
``I'll give up my pay,'' said Thomas when Councilman Frank Wendell suggested that members donate their monthly stipend to help fund the special audit. Council members in this town of 1,348 residents are paid $50 a month.
Town Manager Dick Barton, soon to be 70, announced his Dec. 12 retirement at Tuesday's meeting. Cape Charles resident Betty Hall asked if Barton was being pressured to leave.
``OK, he's retiring,'' said Hall to the Town Council. ``But he's retiring under duress. If this budget isn't working the way you think it should, I blame you.''
Barton explained that Cape Charles' one-person treasurer's office couldn't keep up with its accounting demands. The town's aging computer, he said, was being ``run to death.''
The computer's program has glitches that prevent Cape Charles from accessing some types of financial information, said Ella Stratton, the town treasurer. And she said the office's copy machine isn't big enough to reproduce the full-page computer report, so some information - like the percentage of each department's budget that has already been spent - isn't routinely presented to the Town Council.
The town manager predicted the audits would determine that spending for 1994/95 came close to budget restrictions.
``You can mickey-mouse the numbers all you want,'' Barton said. ``But last year (1994/95), with a budget of more than a million dollars, we were only out of balance by $2,000.''
Audits can be slow. The 1993/94 audit - done by Johnson and Dooley, a Danville accounting company - was given to the Town Council on April 10, 10 months after the books closed.
The auditors reported that Cape Charles had a number of weaknesses in its financial record-keeping:
The accounting was handled entirely by one person - a situation that called for ``continual monitoring.''
The general ledger accounts had not been reconciled on a monthly basis and the accounts of individual funds did not balance.
Revenues and expenses of the previous year had not been closed into the fund balance account.
Last month, the council members voted to borrow $75,000 to cover town expenses. This month, they are wondering if they have all the information they need to spend the town's money wisely. by CNB