By: Libi Uremovic , December 01, 2013 | Original Article at Patch.com
On October 15, 2013 a Public Records Request was submitted to the City of Beaumont for copies of the 2010, 2011, and 2012 Internal Controls Reports prepared by GAAP Auditing Firm Moss, Levy, Harzheim. The City required $50 advance payment which would pay for 200 pages of documentation.
The records were released on November 25, 2013. The City took 40 days to fill the request at a cost of $8.75. The City had to issue a refund $41.25.
The 2010 Internal Controls Report consists of copies of pages 82 & 83 from the 2010 GAAP Audit. Apparently the Auditing Firm of Moss, Levy, Hartzheim did not produce a separate Internal Controls Report as claimed in the Audit Report.
The 2011 Internal Controls Report consists of 12 pages. The Report list as a Material Weakness a $10,871.054 General Fund Deficit.
There are Five Significant Deficiencies listed on the 2011 Internal Controls Report:
- Deficit Fund Balances In Major Governmental Funds
- Deficit Cash Balance in General Fund
- Deficiencies in Internal Controls over Cash Receipts
- Deficiencies in Internal Control over Cash Disbursements
- Deficiencies in the Employee Advances & Employee Computer Loan Program
All of the above deficiencies have been problematic for years, but the 2011 Internal Controls Report Status of Prior Year’s Recommendations is ‘None Reported’.
The 2012 Internal Controls Report is 16 pages long. The Report list as a Material Weakness a $4,162,062 General Fund Deficit. This total over $15 Million General Fund Deficit in two years.
There are Six Significant Deficiencies listed on the 2012 Internal Controls Report:
- Deficit Cash Balance in General Fund
- Deficiencies in Internal Control over Cash Receipts
- Deficiencies in Internal Control over Cash Disbursements
- Deficiencies in Cash Disbursements Test of Control
- Deficiencies in the Internal Control over Payroll.
- Bank Reconciliation Not Prepared & Reviewed Timely
CalPERS:
Page 3 of both the 2011 and 2012 Internal Controls Reports states the most sensitive estimates affecting the financial statements were:
Management’s estimate of the funding progress of CALPERS is based on CALPERS’s estimate, the funding progress of OPEB is based on an actuarial report prepared by a third party, the collectibility of receivables (including accounts, notes, & loans receivables, and advances to RDA), the estimated historical costs of capital assets and the estimated useful life of the capital assets were based on historical data and industry guidelines.
The financial security of CalPERS is based in part on the ability of the City to collect debt. Notes & Loans Receivable refer to the Personal Loans and loans such as the $70,000 funding of the Beaumont Shooting Range; RDA Advances from ‘somewhere’. There are no options to recoup these funds and they will have to be charged-off.
Page 12 of the 2012 Report lists 2012-9 PERS Not Paid Timely and states:
During the review of PERS payments in fiscal year 2011-2012, we noted that ALL payments were completed in fiscal year 2012-2013.
The City was already behind in CalPERS payments when they overdrew the General Fund Bank Account in November 2011. CalPERS payments did not resume until December 2012. The City made $2 Million in CalPERS payments in April 2013.
The City of Beaumont offers wonderful benefits, but those benefits are based on the City’s solvency and ability to pay.