Audit Reveals City’s Financial Problems

At the City of Hazlehurst’s October meeting, not much was said about the annual audit prepared by Henderson and Godbee, LLP, Certified Public Accountants of Valdosta.
Because the council had to find a new accounting firm to conduct the audit after learning at the last minute that the previous accounting firm was no longer conducting audits, the finalization of the 2018 fiscal year audit was months behind schedule, as the city has already completed FY2019.
It was pointed out to the council that the revenues generated in FY2018 was $3,360,000, which was in line with the budget amount of $3,335,000.
But the expenditures were another matter. While expenditures were budgeted to be $3,238,000, the actual expenditures were $4,010,000.
Two things jumped out at the auditors: excessive cost overruns in the airport expansion project and high capital projects costs.
The airport improvement fund showed revenues of $2,022,000 with expenses of $2,858,000. But the project was funded through a process whereby the city expends the funds and is reimbursed by state and federal grant money.
The total revenue for capital projects was $2,464,000 as compared with $3,552,000 in expenses.
The water and sewer enterprise fund showed a loss of more than $122,000, which Mayor Bayne Stone pointed out was unusual as the water and sewer system historically makes a profit. Neither Stone nor Commissioner Eric Griffin, who is over the water and sewer department, could figure out why the department lost money.
The audit revealed that expenditures in the General Fund were almost $650,000 more than revenues, Airport Improvement expenditures were $835,000 more than revenues and Other Government Funds expenditures were $250,000 more than revenues, as total expenditures surpassed total revenues by $1.7 million.