Components of the recently approved Tahlequah city audit suggest questions remain about the finances of separate legal entities operating under the auspices of the municipal government.
Those include the Tahlequah Public Works Authority and City Light and Water Department, Tahlequah Hospital Authority, Tahlequah Industrial Authority, Tahlequah Education Facilities Authority and Tahlequah Public Facilities Authority. These entities must provide their audits before the city can provide its own.
Arledge & Associates, PC, conducted the audit report for TPWA and City Light and Water. It was determined that the authority was not recording and reviewing capital assets correctly, which resulted in a restatement in prior period net assets. Management representatives said they are working to address software issues and execute procedures to correct the matter.
When it came to cash flow for 2018, the new TPWA administration building impacted the numbers.
"Our decision to pay cash for the building, as opposed to long-term financing, was a $1.5 million cost that came directly from our cash revenues," the report said.
Officials pinpointed a need for major improvements to the water treatment facilities and waste water flow. Those projects are expected to cost $15,000,000.
TPWA does plan to have a cash reserve cushion in the event of an emergency.
The audit report concerning the Tahlequah Hospital Authority, conducted by Eide Bailly, LLP, indicated deficiencies of a properly designed system over financial reporting were due to "limited resources to budgetary constraints." This could result in a misstatement to the financial statements, the audit indicated.
The auditor findings of financial statements indicate it is the responsibility of management to make decisions on whether to accept the degree of risk related to the "condition" because of cost.
As to the cost report estimate, the hospital authority did not complete an estimate of the year's settlement. The auditor recommended that the hospital authority execute a system that would fit controls over cost report settlements.
Regarding account reconciliation, the auditor found certain accounts "are not reconciled from a sub-ledger or other detail and support to the general ledger on a timely basis," according to the report.
The recommendation is that management prepare reconciliations on a timely manner so misstatements could be identified. Responsible officials said management developed a process to reconcile accounts on a regular basis.
The hospital issued $18,235,474 and $6,314,011 in new debt in 2018 and 2017, respectively. Debt payments of $14,592,989 and $1,890,554 were also made.
Economic factors in next year's budget include $105,000,000 for conservative net revenue.