Town Board Special Meeting - Interim Audit

The Town of Oriental has called a special meeting for February 10 to discuss "interim professional accounting/auditing assistance, and to address additional personnel matters."

This appears to be for the purpose of addressing a proposal made by Commissioner Venturi at last Tuesday's town board meeting that the town contract with the auditing firm of Pittard, Perry and Crone to perform a mid-term audit. The cost: $2400. The reason: "the books haven't been balanced since October."

This is a superficially reasonable proposal that completely misses the point of an audit.

The reason that municipal audits are governed by the NC Local Government Commission is because the LGC is the agency that issues bonds on behalf of towns. Audits are for three purposes:
(a) to determine the financial health of the municipality (we are healthy);
(b) to verify that enterprise funds like the town's water system are financially separated from other funds, including the general fund (our audit raised a problem about that, but the Town Board had already identified the problem and was working to correct it);
(c) to determine that financial controls as required by state law are in place. Our auditor identified a number of problems in that area (e.g. lack of a purchase order system) that have existed for years.

What the audit doesn't do is "balance the books."

If there is, as alleged, a problem with the books, we need to identify the problem we're trying to solve. Then decide what is the proper instrument to solve it.

If the problem is that the books don't balance (whatever that means) or that the bank statements can't be reconciled, or that the town manager (as he admitted Tuesday) has made some incorrect Bay River entries, we don't need an auditor to correct that. We need a bookkeeper. We used to have a part-time bookkeeper. What happened?

Even if there is no present problem with the books, we should retain a bookkeeper.

It never occurred to me when we hired Mr. Cahoon that we were looking for a qualified bookkeeper. We shouldn't be paying him as much as we do to keep the books. He needs to manage. He needs to watch budget line items. He needs to make recommendations about budget amendments or other changes in priority in a timely fashion and bring problems to the Town Board's attention. He needs to supervise the town's affairs.

An auditor is not a bookkeeper. No one on town staff, so far as I know is a qualified bookkeeper.

The town should hire a part time bookkeeper.