Commissioner criticizes city audit firm

By Tom Joyce - tjoyce@civitasmedia.com
Commissioner Shirley Brinkley questions why Mount Airy’s latest financial report was not presented on time, before being told that the city government was partly to blame. - Tom Joyce | The News

Usually, awarding the city audit contract is routine business for Mount Airy officials, but that process has encountered turbulence with one commissioner’s charges that things have just not added up with the present provider.

Commissioner Shirley Brinkley mainly cited a delay in the presentation of Mount Airy’s last audit report by Martin Starnes & Associates, a Hickory accounting firm that has handled this task since 2011.

However, discussion during meeting last Thursday night — which included some sparring between Brinkley and Commissioner Jon Cawley — indicated that the delay was at least partly due to extra work the city government has been devoting to its Barter Theatre project. That is said to have diverted attention from the audit process.

The concerns surrounding Martin Starnes & Associates surfaced right off the bat at the meeting. Brinkley asked that contract-renewal action with the firm be removed from a consent agenda, in which multiple items are approved in a blanket vote with no discussion, to the regular agenda for a full discussion.

“I have concerns,” she said of awarding the $33,980 contract to the Hickory firm to check the city’s books for the 2017-2018 fiscal year that ends on June 30. State law requires an annual independent audit of a locality’s finances to ensure public revenues and expenditures have been handled properly.

Martin Starnes & Associates was first awarded a contract to perform Mount Airy’s audit in 2011, and after doing so for five years was granted a contract extension for another five years in December 2015. The city is now in the third year of that extension, with votes occurring annually on the contract for the audit of each upcoming fiscal year.

Timing questioned

Brinkley said she was somewhat skeptical about such a long-term arrangement with the same company, but was more bothered by the lateness of the last audit report from the Hickory firm for the 2016-2017 fiscal year.

In past years, a representative of the firm makes the report to the commissioners in November, but for the 2016-2017 audit that didn’t happen until January.

Brinkley said she thought where governmental processes were concerned, such specified completion dates were “set in stone.”

“My concern is if we expect to have it by the end of the year, we should have it,” Brinkley said of the audit report, a document used in guiding budget decisions for the next fiscal year.

She added that it was her understanding one reason for the delay involved an employee of Martin Starnes & Associates having a baby.

“It bothers me there wasn’t a Plan B here,” Brinkley said. “A company as large as Martin Starnes (which pictures about 50 employees on its website) should have a Plan B.”

While she stopped short of rejecting the contract award to the firm, Brinkley said she thought it should provide a discount for the upcoming audit to compensate for the delay.

“I think we’ve put them on a pedestal,” she said, mentioning a lack of “clawback” provisions in the contract with penalties or other recourses if key dates aren’t met.

Accounting firm defended

While acknowledging some recent personnel difficulties on behalf of Martin Starnes & Associates, city staff members responded to Brinkley’s concerns that it doesn’t deserve all the blame.

“They did have some staffing issues,” said City Manager Barbara Jones, who mentioned that logistical limitations among both parties at the end of last year also were responsible.

“It wasn’t all Martin Starnes,” Finance Director Pam Stone agreed while accepting partial responsibility for the delay. “We had a lot to do in December.”

“All we’ve had on our mind in the last four months is the Barter Theatre,” Commissioner Cawley interjected at one point in reference to a process culminating on March 1 with a 3-2 vote in favor of expanding the Barter locally.

With everything that was going on, including the holiday season, both sides thought it best to delay the audit report presentation until January, Jones said.

“It was a matter of our schedules and their schedules.”

The audit process also did not start until September, which was later than usual.

However, the Hickory firm did meet a state requirement for turning in Mount Airy’s audit to the Local Government Commission by Nov. 1.

Cawley takes swipe

Commissioner Cawley appeared irked by Brinkley’s criticism of Martin Starnes & Associates. He pointed out that it is saving the city about $13,000 per year in audit services, based on what other firms had offered when the contract was put out for bids in the past.

“I think Martin Starnes has saved us a lot more than they’ve cost us,” Cawley said.

He then engaged in an exchange with Brinkley over her stance.

“If we want to talk about something, let’s talk about real stuff.”

“This is real,” Brinkley responded.

“I respectfully disagree,” Cawley said.

“You’re wrong,” said Brinkley.

Mayor David Rowe then asked for a motion for action on the audit contract for next year, which Cawley supplied immediately.

The resulting vote was unanimous.

Commissioner Shirley Brinkley questions why Mount Airy’s latest financial report was not presented on time, before being told that the city government was partly to blame.
https://www.mtairynews.com/wp-content/uploads/2018/03/web1_Question-this.jpgCommissioner Shirley Brinkley questions why Mount Airy’s latest financial report was not presented on time, before being told that the city government was partly to blame. Tom Joyce | The News

By Tom Joyce

tjoyce@civitasmedia.com

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.