What an afternoon of music!
We are certainly fortunate in Oriental to have a venue like the Old Theater and a Music Society able to recruit top notch musicians like Valentina Lisitsa. It probably helps that she has made her home in North Carolina.
This afternoon she announced each piece, giving a short lecture tinged with humor and insight. Then she sat at the piano, wearing high heeled pumps and played away, her long fingers moving so fast they seemed a blur, but extracting every last ounce of passion from the music.
The highlight: a magic performance of Rachmaninoff's Concerto Number 3 for Piano and Orchestra, without the orchestra. She explained that it would sound fine without the orchestra, since the orchestra "just hums along," anyhow. She invited the audience to hum along, too, if they felt the need. No one did.
When she comes back to Oriental, don't miss the chance to hear her perform.
Sunday, December 13, 2009
Spirit of Christmas Parade
Four years ago, with our boat laid up in Portsmouth Virginia awaiting a rebuilt transmission, my wife and I drove into Oriental to find a parade about to start. We found a vantage point at the corner of Broad and Hodges and thoroughly enjoyed the show.
We spent the night at Oriental Inn, had coffee and bagels at The Bean the next morning and met many residents. By the time we left to drive back to our boat, we knew we would spend more time in Oriental. We're still here.
Yesterday evening was our fifth Spirit of Christmas parade. The crowd was much smaller than in the past, and the parade seemed smaller as well. Maybe it was the cold weather.
We spent the night at Oriental Inn, had coffee and bagels at The Bean the next morning and met many residents. By the time we left to drive back to our boat, we knew we would spend more time in Oriental. We're still here.
Yesterday evening was our fifth Spirit of Christmas parade. The crowd was much smaller than in the past, and the parade seemed smaller as well. Maybe it was the cold weather.
Friday, December 11, 2009
Perfection
About twenty-five years ago, a neighbor of mine took clippers to every bush and tree in his yard and trimmed them to what he thought was a perfect shape. Among his trees was a dogwood that he trimmed into a perfect sphere on top of a straight trunk. Why would anyone do that to a dogwood?
The yard looked like illustrations we have all seen in children's books, wherein the trees and most of the animals assumed perfect geometric shapes.
Reflecting on this phenomenon, it occurred to me that what makes life interesting is not perfection, but imperfection. It is deviation from perfection - the asymmetries rather than the symmetries of life that make other persons recognizable. It is variations in thought and opinion that make other people intellectually interesting. If we were all perfect, by definition we would all be alike. And boring.
Vive le difference.
The yard looked like illustrations we have all seen in children's books, wherein the trees and most of the animals assumed perfect geometric shapes.
Reflecting on this phenomenon, it occurred to me that what makes life interesting is not perfection, but imperfection. It is deviation from perfection - the asymmetries rather than the symmetries of life that make other persons recognizable. It is variations in thought and opinion that make other people intellectually interesting. If we were all perfect, by definition we would all be alike. And boring.
Vive le difference.
Monday, December 7, 2009
Planning for Oriental's Future
Last Friday I met with a graduate student working on a dissertation about land use planning in coastal communities. She asked an interesting question: "to what extent, if any, is sea level rise or flood risk incorporated into land use planning?"
That seems like a good question. In the past four years, the sea level datum for Pamlico County has been raised a foot. How many more feet will it take for us to have a serious problem?
Estimates vary as to how much sea level is expected to rise in the next century: from one to seven meters. One meter would bring the water over Hodges Street most of the time. Seven meters might leave some of my roof exposed. No one estimates that sea level will go down.
It wouldn't hurt to give this some thought.
That seems like a good question. In the past four years, the sea level datum for Pamlico County has been raised a foot. How many more feet will it take for us to have a serious problem?
Estimates vary as to how much sea level is expected to rise in the next century: from one to seven meters. One meter would bring the water over Hodges Street most of the time. Seven meters might leave some of my roof exposed. No one estimates that sea level will go down.
It wouldn't hurt to give this some thought.
Sunday, December 6, 2009
A Day that Lives in Infamy
Sixty-eight years ago today (Dec. 7, 2009) the landlord pounded on the door of our upstairs apartment in Tallahassee and announced: "the Japs have bombed Pearl Harbor." I was only four and a half years old, but I understood everything he said.
My dad was a Tech Sergeant in the Army Air Corps. Just two days before, he had returned from the Carolina Maneuvers. Earlier in the summer, while my dad was away at the Louisiana Maneuvers, my brother was born in Yazoo City, Mississippi. Later, when my grandmother drove us back to Tallahassee, we were caught in an endless military convoy poking along at about thirty-five miles an hour along two-lane highways, through small southern towns, around courthouse squares.
Three months after Pearl Harbor, my dad left for Mobile, Alabama to prepare for overseas movement. We stayed with my grandparents in Holmes County, Mississippi and didn't see my dad again for more than three years.
During those three years, we received one five-word Western Union telegram from him and occasional letters. We had no telephone. So the normal means of communication was by hand-written "V-Mail" letters reviewed (and often redacted) by censors.
No e-mails. No twitter. No digital photos. No satellite communications.
It was another time. And New Guinea was far, far away.
My dad was a Tech Sergeant in the Army Air Corps. Just two days before, he had returned from the Carolina Maneuvers. Earlier in the summer, while my dad was away at the Louisiana Maneuvers, my brother was born in Yazoo City, Mississippi. Later, when my grandmother drove us back to Tallahassee, we were caught in an endless military convoy poking along at about thirty-five miles an hour along two-lane highways, through small southern towns, around courthouse squares.
Three months after Pearl Harbor, my dad left for Mobile, Alabama to prepare for overseas movement. We stayed with my grandparents in Holmes County, Mississippi and didn't see my dad again for more than three years.
During those three years, we received one five-word Western Union telegram from him and occasional letters. We had no telephone. So the normal means of communication was by hand-written "V-Mail" letters reviewed (and often redacted) by censors.
No e-mails. No twitter. No digital photos. No satellite communications.
It was another time. And New Guinea was far, far away.
Saturday, December 5, 2009
Welcome to Mile 181
Mile 181 on the Atlantic Section of the Intra Coastal Waterway brings you to Oriental, NC. Heading North or South on the ICW will take you to other interesting places. At Moorhead City, turn left into the Atlantic Ocean and go anywhere in the world. Many residents of Oriental have followed that path.
I expect this blog to focus on issues and interests important to the Town of Oriental, to Pamlico County, Pamlico Sound and Eastern North Carolina. Like the body of water at our doorstep, though, these concerns can lead offshore and to other exotic ports of call.
I expect this blog to focus on issues and interests important to the Town of Oriental, to Pamlico County, Pamlico Sound and Eastern North Carolina. Like the body of water at our doorstep, though, these concerns can lead offshore and to other exotic ports of call.
Water Boarding
I understand why some officials may view undergoing an audit as a form of torture. Being criticized in public can be, at the very least, uncomfortable. But a thorough audit is a valuable resource for developing better policies and procedures.
I am critical of some past audits. I have tried to make sure my criticism is based on facts, not on personalities. I don't intend to point a finger of blame. There certainly is shared responsibility between the Town Board and past and present Town Managers.
The point of an audit is not to find blame, but to uncover problems and suggest better ways. Before we ever heard of Pittard, Perry and Crone, the Town Board learned of the Tourism Board's practice of "rolling over" unspent allocation of funds from one budget year to the next and adding that amount to the following year's budget. That is a budget no-no. Long before we had a new auditor, the last board revealed that the administrative fee charged by the general fund to the water fund hadn't been recalculated in eight years. The bottom line is that the general fund had subsidized the water fund to the tune of about $150,000 over that eight year period. That doesn't even take into account the fact (discussed by the previous board in open session) that we weren't allowing for depreciation. We discussed the problem created by not handling the town's occupancy tax as a restricted fund and accounting for it "off books."
I think it would be irresponsible to criticize without offering some constructive suggestions. My main recommendation is to establish (or reestablish) a functioning water board. Ten of the twenty-three control and material deficiencies identified by the auditor are directly connected with administration of our water plant and associated billings and collections (including Bay River).
The town has convened a water board in the past. However, I am unable to find an ordinance establishing the board, spelling out its membership, terms of office and duties. We need such an ordinance.
The water board could advise the Town Board on policy issues, including procedures addressing each of the ten items from the audit. The board could address the question of where about a fourth of our water goes. It could also play an essential role interacting with the Rural Water Center when they come in February to assist us with our rate structure.
This is urgent.
I am critical of some past audits. I have tried to make sure my criticism is based on facts, not on personalities. I don't intend to point a finger of blame. There certainly is shared responsibility between the Town Board and past and present Town Managers.
The point of an audit is not to find blame, but to uncover problems and suggest better ways. Before we ever heard of Pittard, Perry and Crone, the Town Board learned of the Tourism Board's practice of "rolling over" unspent allocation of funds from one budget year to the next and adding that amount to the following year's budget. That is a budget no-no. Long before we had a new auditor, the last board revealed that the administrative fee charged by the general fund to the water fund hadn't been recalculated in eight years. The bottom line is that the general fund had subsidized the water fund to the tune of about $150,000 over that eight year period. That doesn't even take into account the fact (discussed by the previous board in open session) that we weren't allowing for depreciation. We discussed the problem created by not handling the town's occupancy tax as a restricted fund and accounting for it "off books."
I think it would be irresponsible to criticize without offering some constructive suggestions. My main recommendation is to establish (or reestablish) a functioning water board. Ten of the twenty-three control and material deficiencies identified by the auditor are directly connected with administration of our water plant and associated billings and collections (including Bay River).
The town has convened a water board in the past. However, I am unable to find an ordinance establishing the board, spelling out its membership, terms of office and duties. We need such an ordinance.
The water board could advise the Town Board on policy issues, including procedures addressing each of the ten items from the audit. The board could address the question of where about a fourth of our water goes. It could also play an essential role interacting with the Rural Water Center when they come in February to assist us with our rate structure.
This is urgent.
Friday, December 4, 2009
Audit Analysis
In response to popular demand, I decided to go ahead and post my analysis of the Town of Oriental's preliminary audit for FY 2008. This is decidedly unofficial and represents only my own views. These views are subject to refinement (updated January 26 2010).
ORIENTAL 2008 AUDIT COMMENTS
Control Deficiencies (pp 45-46)
1. Expenditures made by the general fund (FY 2007) exceeded authorized appropriations by $1,089 (tourism board) and $692 (environmental). Comment: This comment reflects three separate problem areas: (a) The excess tourism expenditure resulted from the tourism board taking unexpended budget from FY 2006 and "rolling it over" into 2007 without budgeting it. This has been going on for years and violates budgeting 101. Each FY must be budgeted separately; (b) The $692 was a result of underestimating expense of the town's solid waste contract. In both cases, there should have been a budget amendment.
2. Petty cash: no adequate accountability and proper record keeping. Comment: the town did not even keep a petty cash ledger. This problem existed for many years. Petty cash, according to former Town Manager Wyatt Cutler, was reconciled once a month. The problem no longer exists because the former petty cash system has been replaced by the use of town credit cards and revolving accounts.
3. Invoices paid not defaced. Comment: we weren’t using a “Paid” stamp. This has been corrected.
4. Personnel files do not include the current year approved wages. Comment: the files are being updated. Not yet completed.
5. No schedule of accrued vacation hours by employee maintained. This function was available in our accounting software, and was being used, but no printout was being maintained on hand for easy verification.
6. Financial records need to be filed systematically. Comment: filing system is being revised and improved.
7. Powell bill report for June 30, 2009 does not balance. Expenses understated by $3001.10. Comment: This error in the July 15 report was corrected in an August 26 amendment to the report, as soon as it was pointed out by the auditors.
8. Budget amendments have been made only at year end. A check of official minutes in recent years shows that this is true. Budget should be monitored continuously and amended as needed. A factor in the past was that each department had a very large "miscellaneous line" in the budget. This may have contributed to lax budget discipline.
9. Town is billing approximately 63% of gallons pumped from wells monthly. Comment: In general, 12 – 15% waste is about normal. What we have is unlikely to be a billing problem. Water is leaking somewhere. Or it is being used through unrecorded and unread meters, or meters are badly out of calibration. This sounds like a problem with the physical plant, and it needs to be investigated. Good task for a reconstituted water board.
10. Late fees for water and sewer service not charged consistently. Comment: we have no late fees. What we do have is reconnect fees when water is disconnected due to non-payment or at customer request. It may be that some reconnect fees were forgiven due to disconnect being in error or other reason. In any event, reasons for forgiving reconnect fees are now being documented. The water board should review the procedure and recommend policy to the Town Board.
11. Water deposits, sewer deposits and prepaid bills all recorded in same account. Three new accounts have been established. Commingled accounts exist for the period before October, 2009. The problem will eventually go away with time.
12. The general fund charges the water fund $4,000 per month for administrative services. No documentation of how this is computed. Comment: I raised this issue during this year’s budget cycle. Turned out the amount was last calculated in 2001 and not recalculated for eight years, even though we had hired additional personnel, the water testing and other system requirements had grown, and much more public works time was spent on the water system than in 2001. There were other omissions, such as failure to estimate gasoline expense for meter reading. I calculated the general fund had subsidized the water fund about $150,000 between 2001 and 2008 and the annual charge should now be $82,000 instead of $48,000. We took steps in this budget cycle toward correcting this. Not mentioned in the list of control deficiencies, but another shortcoming in financial management of the water system is the failure to provide for system depreciation. Bottom line is that we are still losing money on water. The water board needs to review this before the Rural Water Association comes in February 2010 to assist in reviewing our rate structure.
Material Deficiencies (pp 46-47)
1. Segregation of duties is an on-going issue. Comment: I agree with auditor’s comment “this weakness is impractical to correct at this time due to a small staff.”
2. Bank reconciliations are performed by employees who are not independent of the recording duties and are not reviewed or approved by a second party. Comment: A new procedure assigns this task to Town staff, not the manager.
3. Upon examining the collections drawer it was noted there was approximately $7,000 on hand with some checks 14 days old. Comment: the auditor fails to mention there was no lock on the drawer. Delaying deposits of cash and checks costs money (loss of interest) as well as presenting a security problem. There may have been a misunderstanding on the part of some office personnel that daily deposits would cost the town additional money. Our new manager discovered that was not so. Daily deposits are now being made. We should also take a look at our office safe. There should be a safe suitable for depositing money.
4. The town does not have a purchase order system in place. Comment: The town started using the Peachtree Accounting software purchase order system in October, 2009. It had not previously been used.
5. No listing of journal entries for the year with supporting documentation. No approval process before journal entries made in the accounting software (Peachtree). Comment: this is being corrected.
6. Town does not maintain a fixed asset ledger. Comment: Office personnel insist there is such a ledger. It may be that the town manager didn't understand what the auditor was seeking. In any event, now that the ledger has been located, it turns out not to have included Police Department equipment. This is being added.
7. No computer security controls in place. Comment: Correction of this deficiency is about 50% complete.
8. No approval process for utility adjustments. Comment: Most adjustments are made by Bay River. They are the approval authority. It may be that we should formalize approval of each request to Bay River. Adjustments to water bills sometimes result from misread meters. Policy for making and approving adjustments should be based on water board recommendations.
9. Water extensions not monitored effectively. Comment: this may not be accurate. On the other hand, it might be that this and other water system issues should be addressed by our Water Board. We have had a Water Board in the past, but we seem to have no ordinance establishing it, setting terms of reference for its duties, etc. The last time the board is recorded to have met is more than two years ago.
10. There is no reconciliation process for water payments collected. Comment: This may not be accurate. Since the audit, the town has purchased a cash register module and is using it. This could be another topic for review by the water committee.
11. There is no contract in place with Bay River. Comment: The town has been negotiating with Bay River to correct this omission for several months. As a separate issue not addressed by the auditor, the town needs to negotiate a number of additional inter local agreements or memoranda of understanding with the county, including the Sheriff’s Department and Animal Control.
Bottom Line:
The list of deficiencies is nothing to lose sleep over. The most important of them (except for the cash drawer) had already been identified and were being addressed by the Town Board before the audit began. Most importantly, I think, is the apparent need to reestablish an effective Water Board.
ORIENTAL 2008 AUDIT COMMENTS
Control Deficiencies (pp 45-46)
1. Expenditures made by the general fund (FY 2007) exceeded authorized appropriations by $1,089 (tourism board) and $692 (environmental). Comment: This comment reflects three separate problem areas: (a) The excess tourism expenditure resulted from the tourism board taking unexpended budget from FY 2006 and "rolling it over" into 2007 without budgeting it. This has been going on for years and violates budgeting 101. Each FY must be budgeted separately; (b) The $692 was a result of underestimating expense of the town's solid waste contract. In both cases, there should have been a budget amendment.
2. Petty cash: no adequate accountability and proper record keeping. Comment: the town did not even keep a petty cash ledger. This problem existed for many years. Petty cash, according to former Town Manager Wyatt Cutler, was reconciled once a month. The problem no longer exists because the former petty cash system has been replaced by the use of town credit cards and revolving accounts.
3. Invoices paid not defaced. Comment: we weren’t using a “Paid” stamp. This has been corrected.
4. Personnel files do not include the current year approved wages. Comment: the files are being updated. Not yet completed.
5. No schedule of accrued vacation hours by employee maintained. This function was available in our accounting software, and was being used, but no printout was being maintained on hand for easy verification.
6. Financial records need to be filed systematically. Comment: filing system is being revised and improved.
7. Powell bill report for June 30, 2009 does not balance. Expenses understated by $3001.10. Comment: This error in the July 15 report was corrected in an August 26 amendment to the report, as soon as it was pointed out by the auditors.
8. Budget amendments have been made only at year end. A check of official minutes in recent years shows that this is true. Budget should be monitored continuously and amended as needed. A factor in the past was that each department had a very large "miscellaneous line" in the budget. This may have contributed to lax budget discipline.
9. Town is billing approximately 63% of gallons pumped from wells monthly. Comment: In general, 12 – 15% waste is about normal. What we have is unlikely to be a billing problem. Water is leaking somewhere. Or it is being used through unrecorded and unread meters, or meters are badly out of calibration. This sounds like a problem with the physical plant, and it needs to be investigated. Good task for a reconstituted water board.
10. Late fees for water and sewer service not charged consistently. Comment: we have no late fees. What we do have is reconnect fees when water is disconnected due to non-payment or at customer request. It may be that some reconnect fees were forgiven due to disconnect being in error or other reason. In any event, reasons for forgiving reconnect fees are now being documented. The water board should review the procedure and recommend policy to the Town Board.
11. Water deposits, sewer deposits and prepaid bills all recorded in same account. Three new accounts have been established. Commingled accounts exist for the period before October, 2009. The problem will eventually go away with time.
12. The general fund charges the water fund $4,000 per month for administrative services. No documentation of how this is computed. Comment: I raised this issue during this year’s budget cycle. Turned out the amount was last calculated in 2001 and not recalculated for eight years, even though we had hired additional personnel, the water testing and other system requirements had grown, and much more public works time was spent on the water system than in 2001. There were other omissions, such as failure to estimate gasoline expense for meter reading. I calculated the general fund had subsidized the water fund about $150,000 between 2001 and 2008 and the annual charge should now be $82,000 instead of $48,000. We took steps in this budget cycle toward correcting this. Not mentioned in the list of control deficiencies, but another shortcoming in financial management of the water system is the failure to provide for system depreciation. Bottom line is that we are still losing money on water. The water board needs to review this before the Rural Water Association comes in February 2010 to assist in reviewing our rate structure.
Material Deficiencies (pp 46-47)
1. Segregation of duties is an on-going issue. Comment: I agree with auditor’s comment “this weakness is impractical to correct at this time due to a small staff.”
2. Bank reconciliations are performed by employees who are not independent of the recording duties and are not reviewed or approved by a second party. Comment: A new procedure assigns this task to Town staff, not the manager.
3. Upon examining the collections drawer it was noted there was approximately $7,000 on hand with some checks 14 days old. Comment: the auditor fails to mention there was no lock on the drawer. Delaying deposits of cash and checks costs money (loss of interest) as well as presenting a security problem. There may have been a misunderstanding on the part of some office personnel that daily deposits would cost the town additional money. Our new manager discovered that was not so. Daily deposits are now being made. We should also take a look at our office safe. There should be a safe suitable for depositing money.
4. The town does not have a purchase order system in place. Comment: The town started using the Peachtree Accounting software purchase order system in October, 2009. It had not previously been used.
5. No listing of journal entries for the year with supporting documentation. No approval process before journal entries made in the accounting software (Peachtree). Comment: this is being corrected.
6. Town does not maintain a fixed asset ledger. Comment: Office personnel insist there is such a ledger. It may be that the town manager didn't understand what the auditor was seeking. In any event, now that the ledger has been located, it turns out not to have included Police Department equipment. This is being added.
7. No computer security controls in place. Comment: Correction of this deficiency is about 50% complete.
8. No approval process for utility adjustments. Comment: Most adjustments are made by Bay River. They are the approval authority. It may be that we should formalize approval of each request to Bay River. Adjustments to water bills sometimes result from misread meters. Policy for making and approving adjustments should be based on water board recommendations.
9. Water extensions not monitored effectively. Comment: this may not be accurate. On the other hand, it might be that this and other water system issues should be addressed by our Water Board. We have had a Water Board in the past, but we seem to have no ordinance establishing it, setting terms of reference for its duties, etc. The last time the board is recorded to have met is more than two years ago.
10. There is no reconciliation process for water payments collected. Comment: This may not be accurate. Since the audit, the town has purchased a cash register module and is using it. This could be another topic for review by the water committee.
11. There is no contract in place with Bay River. Comment: The town has been negotiating with Bay River to correct this omission for several months. As a separate issue not addressed by the auditor, the town needs to negotiate a number of additional inter local agreements or memoranda of understanding with the county, including the Sheriff’s Department and Animal Control.
Bottom Line:
The list of deficiencies is nothing to lose sleep over. The most important of them (except for the cash drawer) had already been identified and were being addressed by the Town Board before the audit began. Most importantly, I think, is the apparent need to reestablish an effective Water Board.
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