Memphis audit findings sharply critical

A letter from the city's auditor for the year that ended last summer is full of bad news.  And for some reason, Council members only got it today, nine months after the end of that fiscal year and two days after the Mayor presented his tightest budget ever.

The letter from auditor Watkins Uiberall is just a snapshot.  But it's findings are big... And they're bad.

"I think if you put it in the private sector, Darrell, if an article was written about an audit management letter about a public company in the Wall Street Journal, there'd be a rush to the phones to short the stock," says City Council Budget Chairman Jack Sammons.

Sammons got the letter Wednesday and has already requested a review of staff credentials.

Among the audit's findings:

City finance officials waited three months after the end of the budget year to reconcile bank accounts.

In some cases, accounts hadn't been adjusted for three years, leading to six point seven million in adjustments.

The city's golf fund was losing millions.  $1.3 million last year alone, $2.4 million, total.

The auditors found that the fund for money seized in drug busts was out of wack to the tune of $1.3 million.  And they found the city was listing as assets buildings that didn't even exist anymore, like Tim McCarver stadium, torn down a year earlier.  The City was also listing assets it doesn't own, like Stax Museum and the Lorraine Motel.

"There are a number of fundamental principles in managing a business that become the third rail, that you absolutely don't violate," says Sammons.  "Number one, which is you watch your money.  You know on a daily basis, your cash position, your payable position and your receivable position.  And it's apparent through this management letter for some time, this City didn't have a clue what their current position was and from a business perspective, that's a scary thing."

Sammons was clear though that the current finance directors are doing good work and have a good plan.  They're going to address this report at Tuesday's budget committee meeting.