Audit shows payroll taxes not being paid; checks written with no money in the bank
“I will give a statement on the economic status of the town on Monday,” said Century Mayor Henry Hawkins. “I'm not going to comment until Monday. I am working on a policy so our people can do their jobs and not feel like they're being attacked or intimidated.”
As Councilwoman Ann Brooks, Sandra McMurray Jackson, Councilman Luis Gomez, CPA Robert Hudson and Century Town Clerk Kim Godwin met with auditors in a preliminary audit meeting down the hall to give their findings, Mayor Hawkins remained in his office Tuesday morning, tight-lipped, saying, “I've learned to pick my fights.”
The situation at town hall arose after a budget workshop held Thursday, July 26, when Councilwoman Brooks read a letter alleging that poor management in town leadership is the reason 41 instances of insufficient funds since Feb. 2018 cost the town $1,394 in overdraft charges the council did not know about, although the charges were reversed. According to Brooks, this kept a negative balance frequently in the town's payroll bank account. She wrote, 'We applied to United Bank to refinance our debt; do you not think that the way we have handled our bank account would affect their decision to deny our application to refinance?'
“It had been brought to my attention we had payroll taxes that had not been paid, so I started looking when I found checks with insufficient funds,” said Brooks in a later interview. “Largely, the rest of it is because we are in budget time and we really need to focus on cutting our spending.”
Brooks stated that until a procurement policy is developed and adopted, the charter dictates policies the council must approve expenditures greater than $199.
Brooks stated that the town provides the 'Cadillac' of health insurance for employees, paying 99 percent of the insurance cost and 78 percent of their family's cost, which the town cannot afford.
“The insurance issue is something I have voted against. It is a place we can cut money,” she said. “It's an unusual expenditure. Most businesses cannot afford to pay 99 and 78 percent of their employees' insurance. I've always been against that expenditure. That's one of the ways we can reduce our budget.”
Brooks cited the examples of consistently late or unpaid payroll taxes to the IRS and the recent proposed purchases of two vehicles without proper bids contributing to the town's money woes.
“We were not purchasing things correctly,” she said. “Our charter says a purchase must be put out for bid if it's more than $500. We need to advertise, ask for bids, then the council needs to approve the contract we award. We need to do as much with less money.”
Brooks called for updates from the mayor regarding progress with the town's debt refinance, gas franchise and any other activity that affects the town's finances, adding that she should not have to request public records to learn that the administration believes the reason the “gas department is in such dire straits is that we had an employee who was not reading the gas meters.”
“We need more transparency,” she said. “We received a very bad audit report last year, and the council has to get a better handle on the finances. We had a different auditor as of September, 2016, and we have never had this sort of audit result before. Because of the warnings that the town has gotten, that's why the council has been watching our expenditures, but we can only do that to the extent we can get the information. Robert Hudson is now providing us financial statements.”
Brooks compared the number of town employees in Century and Flomaton, citing that as another aspect of budget overspending.
“I've been told town of the Flomaton office has two employees and we have six, and I've heard our employees have a lot of free time,” she said. “It's been recommended to me we cut our employees.
I think we could certainly cut out two employees, then we'd have twice as many as Flomaton, I think that's a very good start.
“These issues that we have, have been issues for years,” Hawkins said Tuesday. “We've got the handle on them, as much as we can. Sometimes there's no training, and so when they get thrown under the bus, they want to make sure they run over them good, before they offer any help. Making accusations, without presenting a solution, doesn't help the situation. The problem's been escalated, now the town is in an uproar, thinking that we're broke.”
When asked if the insufficient funds issue was true, Hawkins said, “I'm not going to dispute it, I'm going to get my facts.”
“She's trying to do my job to make me look bad,” said Hawkins about Councilwoman Brooks. “That's the issue. We're not working in harmony. We're a dysfunctional unit. The previous administration never had to deal with this. She's requesting stuff, administrative-wise. It's my job to take care of the administrative portion. I brief the council when there's an issue. And you do more damage with a lack of information than you would with preventative measures.”
When asked about the lack of revenue this time of year in the gas department as perhaps one reason the town has revenue issues, Hawkins said that the town has no way to know how much gas its got, and that he wants to install a meter as a way for the town to verify the amount, instead of trusting that amount is what the town receives.
“We're losing probably 38 or 40 percent of gas, however they bring it in,” he said. “We're losing big time revenue and part of that is we do not have a meter. We don't have any way to regulate what comes in and what goes out, that's the problem.”
Hawkins said that although some think the problem is in the billing of the natural gas, the age of the gas meters and the gas system in addition to the lack of a way to regulate it contributes to the lack of revenue for the town.
There will be a Town Council budget workshop at 3 p.m. this Friday, Aug. 3, atTown Hall.
