After a series of city financial crises coming to light, Finance Director Albert Avila assured Oakdale Interim City Manager Greg Wellman that the city’s tardy 2010-2011 audit would be received by Friday, May 11 and delivered to the city council. Last week the council also just received notice of the 2009-2010 audit report that had been withheld for nearly a year.
On Tuesday afternoon, May 9, Wellman made available a letter from the city’s auditing firm, Moss, Levy, and Hartzheim dated May 25, 2011 addressed to the mayor and city council regarding the 2009-2010 audit.
The letter stated that the audit “identified certain deficiencies in internal control that we consider to be significant deficiencies.”
A significant deficiency by their auditing terms is a deficiency in internal control that is important enough to merit attention by those charged with governance.
The 23-page letter that listed 22 factors for 2010 that it identified as “significant deficiencies” was never delivered to the city council, a responsibility Avila is taking the blame for.
“I have so much going on. I thought it had gone to the council, apparently it did not,” said Avila when asked about the belated letter on city financial practices. “It was not any effort to hide anything.”
“There is no way without credible numbers or a credible audit that I can rule out theft, embezzlement or fraud,” said Wellman on May 9. “That’s why you have audits.”
Wellman, who has been a vocal critic of what has been discovered regarding the city’s financial status, said that without an accurate audit of the city’s finances he cannot confirm Oakdale’s soundness for the future in drafting the 2012-2013 fiscal year budget.
“Without current numbers available, I cannot even go into contract negotiations,” said Wellman.
The withheld 2011 letter of the 2010 audit and the late 2011 audit are only part of a series of ongoing discoveries that are making many wonder about the financial solvency of the city and the proficiency of the finance department.
Last week, City Treasurer Mike Murray abruptly resigned surrounding concerns of city financial mismanagement and a dispute in the process in which he was asked to sign 17 overdue statements.
In an interview with The Leader on May 9, Avila initially claimed all the Treasurer Reports were prepared on a monthly basis by his staff and left in a designated box for Murray to sign. He said he never recalled any backlog of the reports disputing Murray’s claim that he was notified in late April of “several” reports that were ready for him to come in to sign.
A sampling by The Leader of the 17 reports showed that all of the 2012 Treasurer Reports were prepared by staff member Patty Cooper actually on April 15, 2012. Going back to 2011, the sampling showed reports from the beginning of the year prepared on June 25, 2011 and at the end of 2011 prepared on February 22, 2012.
Avila later said that the reports may have “stacked up” and would “go under the radar with a juggling staff.”
Both Murray and Avila said there was no training given when Murray became treasurer on what the duties actually were for the position.
“We had very loose communication on when he was needed to come in,” said Avila.
Also, Avila admitted the documents for the 2011 FY budget audit were submitted late to the contracted firm.
“I’m always playing catch-up here,” said Avila. “People here are getting worn out.”
Avila said the Moss, Levy, and Hartzheim firm received the materials from him in January and were supposed to have the audit ready in February.
“It fell off my radar and I didn’t push them to get it done,” said Avila, who claimed other projects diverted him. “Only last week did there become a sense of urgency to get the audit back.”
Avila said he anticipated the council to have a conference call with the auditors this week to answer any questions.
In an email to Wellman about the delay in getting him the 2011 report, Avila stated, “I apologize for the delay in getting the Audit Report to you and the City Council. I should have been more forceful with the Auditors in getting this task completed.”
Avila, who has been the finance director for the last eight years, pointed out that his staff is the same as it was in the 1980s despite the city’s population tripling in size. He said the staff is very devoted and is using technology to help overcome the voids in staff.
“It’s overload around here,” Avila said. “I’m working 12 hour days to keep up.”
Avila said he wanted to assure citizens that Oakdale is financially solvent.
“We have over $12 million in our bank accounts,” he said. “We are current on all our bills and we will pay our bills.”
Avila was adamant that there was no mismanagement or theft of any funds.
“Absolutely not,” Avila claimed when asked about the possibility. “Everything is properly documented.”
Wellman confirmed the city received the 113-page audit on Friday, May 11. The audit will be forwarded to the city council for review.