Amador County – A Sutter Creek auditor has issued an opinion on 2009-2010 city books only with a disclaimer that its work is largely incomplete, due to financing accounts that have been not been reconciled.

City auditor Ingrid Sheipline of Richardson & Company said the audit found possible accounts that have not been reconciled in the past, “possibly even ever.” The best approach would be to issue an opinion only with a disclaimer, and footnotes that show a $1.2 million general fund deficit. She said city management has taken steps to move the city toward elimination of the deficit.

Sheipline said they believe that $3 million in Caltrans bridge repair funds were restricted, but $1.2 million of it was transferred to other accounts to cover debts. She said in 2010, the fund transfers were classified as loans, so they can begin repayment, and $900,000 in additional bridge funds were borrowed, making up the $2.1 million in borrowings from the “relinquishment fund.”

The audit, which started in April 2011, found 2006 sanitation authority funds from that were not previously recorded, and investment policy violations. Sheipline said a large number, 42 adjustments were identified, and they “decided to issue a disclaimer and cease requesting adjustments” in March.

Councilman Gary Wooten said he appreciated the really in-depth audit. Mayor Linda Rianda said if the city had a good audit in the past, they would have found the problems sooner and worked to resolve the issues. Councilman Jim Swift asked about a plan of action and helping to see that it is completed.

Sheipline said regular reports would help. City Manager Sean Rabe said some fixes are required by July and would not be a problem. Other changes are required by 2013.

Mike Kirkley asked about use of the restricted bridge funds. Wooten said only two of us were on the Council when the funds wee used. Councilman Tim Murphy said they were told at the time by ACTC and Caltrans that they were unrestricted general funds that could be used on all of the repairs, none of the repairs, or some of the repairs.

City Attorney Derek Cole said he looked at it and believes the funds are restricted, but after seeing the audit, “I believe the management letter calls for legal analysis.”

Wooten said “it was no big secret back door thing. We were told up front that the funds were unrestricted.” Rianda pointed out that the auditors also said “we are not attorneys,” when they made their opinion that the funds may be restricted. Wooten said he believes the auditors.

Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.