Signal Mountain Won't Pay Accounting Firm For Extra Work On Audit

  • Tuesday, April 11, 2023
  • Gail Perry

The Signal Mountain Town Council has declined to pay an auditing firm extra money it said was due because of inadequate help from city employees in preparing the annual city audit.

There was discussion before voting whether or not to pay an extra amount for auditing services this year to Johnson, Murphey and Wright PC. The firm had a contract to perform the 2022 year-end audit for $26,135, but in order to complete it, the CPAs had to spend a lot of time doing extra accounting work that the previous town employees had failed to do, it was stated. For the extra hours, an additional $6,040 was billed. At a February meeting, CPA Paul Johnson explained the reasons for the increase.

Accounting problems in Signal Mountain began in 2021 and increasingly got worse, he said. His firm was told that the problems would get better, and they believed it. New employees who were meant to straighten up the problems were not hired until a couple of months before the audit began. The contract with his firm was based on cooperation with Signal Mountain’s personnel, he said. What was not done by the town had to be done by the accountants. They spent five days in Signal Mountain versus the two days that had been planned. He said that each year the firm had donated some time and that nothing had been said because it would have been embarrassing for the town. Instead, the town employees were praised for their cooperation and good work.

After acknowledging that there had been problems last year, the council members objected to the added charges because the original contract included that the town would be advised of any changes that were made before they were done. Vice Mayor Elizabeth Baker objected to paying any amount above the amount of the contract because she said the council was not made aware that there were any problems before the bill was sent. And she said since then, it has been discovered that for the two previous years,  there were the same issues that the council was unaware of.

It is now known that in 2021 an extra $5,000 over the contract price had been paid. She said the auditors work for the citizens of Signal Mountain and not the city manager or finance director, and that the council should have been notified.

Council members Clay Crumbliss and Andrew Gardner saw both sides of the issue and considered paying a smaller amount than what was requested, but in the end, the vote to pay any additional amount failed because the council felt that Johnson, Murphey and Wright did not follow the correct procedure. They also questioned if some of the extra work had been caused by turnover of staff at JMW.

The council followed that vote with another that approved moving forward with Waycaster CPA to audit the town’s accounts for fiscal year 2023. The contract price is $23,135.

Cara McGowan was appointed to the library board. With the resignation of another board member, one more seat will be opening soon. And with Susannah Murdock joining the council, council liaisons with several boards were shuffled. Council member Murdock will work with the library board and the planning commission. Vice Mayor Baker will be the liaison with the history and stormwater boards. Ms. Murdock will also be in charge of the council’s objective for improved communications with citizens.

Earlier this year, Signal Mountain bought equipment to stream and record council and board meetings so residents of the town would have access to them. But some boards have approached Mayor Poss asking to be able to meet in other locations. He suggested there could be the option for boards to meet at town hall only when changes that would effect citizens were being discussed. But Town Manager Elaine Brunelle said that trying to track all the changing locations would be an administrative nightmare. Mayor Poss suggested getting opinions from the boards. 

The vice mayor proposed a way to keep Signal Mountain residents informed about the upcoming budget process by posting information on Facebook and with email blasts. A consensus of the council agreed that would be a good idea to educate the public about why and how a budget is done.  An explanation of the budget process, the scheduling of the steps it takes to create a budget, the differences the various funds, will be some of the subjects included and available so the citizens can understand the revenue and expenditures planned for the year.  

The town of Signal Mountain received $2.5 million in American Rescue Plan money for Covid Relief. Plans are now being made for where to spend that money. Signal Mountain’s 2023 budget included $50,000 for new Enterprise Resource Planning software that will be used to manage day-to-day operations of the town. The actual cost will be a one-time expense of $105,000 and $50,000 annually. Before making the purchase, the council wants to get clarification for terms of the contract and ask the seller Edmunds Govtech for a payment schedule rather than a one-time payment.  A special called meeting on Mon. April 17 will be held so the contract can be voted on before the price quoted expires at the end of May.

The yearly paving of streets has been categorized into two projects. One includes a variety of  roads that are in bad condition and the other project includes Timberlinks Drive and Shackleford Ridge Road leading to the high school. Public Works Director Loretta Hopper told the council that $655,000 has been allocated in the budget for paving this year which has been planned for the group of around a half dozen roads that need it the most. The streets around the school could be done with ARP money, she said. The council would like to look at the roads as a whole and asked Ms. Hopper to prioritize those for resurfacing with the amount of money that is available regardless if ARP money can be used.

The purchase of a new John Deere Gator that will replace a Cub Cadet for the public works department was approved. The new vehicle has more functionality and versatility, said Ms. Hopper. It can be used to clear trails and be used for maintenance issues. The cost of the Gator is not to exceed $31,452.

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