Audit finds Hanceville in good shape, but deficit of more than half-million

Discussion

July 16, 2012

Audit finds Hanceville in good shape, but deficit of more than half-million

By Benjamin Bullard The Cullman Times The Cullman Times Mon Jul 16, 2012, 01:27 PM CDT

HANCEVILLE — A comprehensive audit of the city’s finances for the 2011 fiscal year paradoxically found Hanceville to be in good financial shape, despite an end-of-year deficit topping half a million dollars.

The disparity comes courtesy of the city’s ongoing effort to pay off outstanding debts related to the cleanup of last April’s tornadoes — debts that should be offset in the coming fiscal year from reimbursement pledged by the Federal Emergency Management Agency (FEMA).

FEMA required the city last month to pay cleanup contractors more than $500,000 in outstanding balances, if it wanted to be reimbursed later for storm-related expenses paid out of federal funds. In order to do that, the city took out a $550,000 loan. A separate CDBG grant for municipal improvements also adds to the total of federal funds Hanceville has had to account for in 2011.

Because those federal funds are in play, the city was required to conduct a more rigorous annual audit for FY 2011 — a so-called “single audit” required by the U.S. Office of Management and Budget to examine the handling of federal assistance and grant money.

The audit, conducted by Cullman-based accounting firm Segroves & Brewer PC, found the city managed its funds well over the past year — in spite of holding a deficit at year’s end.

“Overall, it looks good. For what the city’s been through, it’s still a good, healthy financial statement,” accountant Scotty Segroves told the city council last week. “I know we’re anticipating a significant amount of money from FEMA that should more than offset that deficit. Hopefully, if everything goes according to plan, that’ll go away, and the city will be back whole again.”

Hanceville city clerk Tania Wilcox said the city would have shown excellent financial health on paper, had the storms never occurred.

“If you look at it, we really did well,” said Wilcox. “Everything that is holding us back came out of April 27, and we’re hoping; really hoping, that we’ll get the FEMA reimbursement money in the near future, which should put us back where we need to be. If you take all the storm and cleanup transactions out of there, we actually would show that we ended the year with a positive balance.”

Segroves confirmed that, and praised Wilcox and city officials for keeping a tight grip on the city’s pursestrings.

“Without the disaster factored in, it would have been positive in all aspects,” said Segroves. “There would have been no deficit funds in the balance, by any means. It’s a testament to the effort and diligence of the city to work through this disaster, to be able to still maintain a healthy balance sheet.”

Mayor Kenneth Nail said the audit’s $17,000 price tag was worth it, for the assurance it provides the city’s federal debtors that Hanceville has administered its federally-funded programs responsibly.

“It’s not just good news for us; it’s good news for them,” said Nail. “Which, in turn, is even more good news for us, since it means there’s no hangup that can cause them to not reimburse us for what we’ve spent cleaning up after these storms. It’s been a headache to keep track of everything that goes along with this FEMA cleanup, but we’ve done everything that’s been asked of us, and we’ve saved a lot of money doing it, so I feel pretty good about where we stand.”

* Benjamin Bullard can be reached by e-mail at bbullard@cullmantimes.com or by telephone at 734-2131 ext. 270.

Text Only

Top News

Search Results

Discussion

Audit finds Hanceville in good shape, but deficit of more than half-million

Site Map

Contact Us