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By MICHAEL McNARNEY mmcnarney@leader.net
Tuesday, March 18, 2003 Page: 1A
WILKES-BARRE – The city should consider selling the abandoned call center
on South Main Street to pay off $9 million in Redevelopment Authority debt,
Parente Randolph auditors have advised the mayor and City Council in a letter.
The letter, not released last week with the rest of the 2001 audit, details
concerns auditors have about the city’s finances and business practices.
Auditors painted a bleak picture when they presented the audit to City
Council at its March 13 meeting.
But the letter, which was supposed to be kept private and for the use of
City Council and city management only, points out problems not mentioned at
the public meeting.
A city employee provided a copy of the letter to the Times Leader.
City spokeswoman Shannon Hayward did not return a telephone call seeking
comment. Finance Director John Koval was not at City Hall on Monday afternoon.
The concerns outlined in the letter include:
The city is owed more than $550,000 for use of its ambulances, and
record-keeping of who had paid what is insufficient. There have been no
efforts to collect the unpaid money.
A collection agency made a sales pitch to council earlier this year, but
neither council nor Mayor Tom McGroarty has taken any action to step up
collections.
Almost 40 percent of small-business and individual loans made by the city
are delinquent or in default, and the record-keeping for those loans is poor.
Auditors recommended that a list of all the loans should be prepared, with
the list showing the status of each loan. They also recommended monitoring the
loans and collecting from debtors who are in default.
Ownership and management of the city’s parkades is spread among different
parts of city government – the city, the Redevelopment Authority and the
Parking Authority – breeding inefficiency and costing taxpayers money.
Auditors recommended that one entity own all the garages and that rates be
raised so they cover depreciation and debt service.
“Through increased efficiencies and profitability such assets will become
an income-generating asset for the city,” auditors wrote. But McGroarty has
said he expects parking to be a money-loser for the city.
The purchase of property and equipment is not recorded, and there is no
asset account group to keep track of the purchases – a violation of general
accepted accounting principles.
Auditors recommended each piece of property should be assigned an
identification number, records should be kept and assets no longer used should
be disposed of.
The city does not have a comprehensive accounting policies and procedures
manual. Such a manual, auditors said, can reduce mistakes and improve
record-keeping.
Auditors made the same observation after the 2000 audit, which was
completed in March 2002.
Then, city officials responded that the city “is currently reviewing all
accounting procedures and plans on writing and implementing a formal
accounting policy.”
Starting Jan. 1 of this year, the city was supposed to adopt accounting
standards that would allow it to prepare annual standardized financial
statements.
The requirement, known as Governmental Accounting Standards Board Statement
No. 34, calls for an accounting of all the city’s assets – from computers to
streets.
Auditors recommended in the 2001 letter – as well as in the 2000 letter –
that the city appoint a committee of employees, auditors and representatives
of its various authorities to figure out how to comply with the requirement.
No such committee has been named.
Michael McNarney, a Times Leader staff writer, may be reached at 831-7305.