The Lexington County community of Swansea, already under fire for trying to charge an area businesswoman nearly $10,000 to provide basic information about the town, had several “significant deficiencies” noted in its 2008 audit, the most recent examination of town financial records made public.
In addition, the town has voted to accept its 2009 audit – which runs through Dec. 31, 2009 – but has refused as yet to release it to the public, said Alberta Wasden, a Swansea accountant and citizen reporter for The Nerve.
Wasden attended an audit workshop on Oct. 26, where specifics regarding the 2009 audit were revealed, including that the town was $1.4 million in debt through the end of last year.
But when Wasden asked for a copy of 2009 audit town officials said no.
Swansea officials said they couldn’t release the audit because “it’s not been made public yet,” Wasden said, even though the audit workshop was an open event. Officials told Wasden the audit must first be sent into the state before it can be released to the public, she said.
Wasden added that she has filed an S.C. Freedom of Information Act request to procure a copy of the 2009 audit.
Attempts to reach Swansea Mayor Ray Spires for this story were unsuccessful.
During the workshop, it was disclosed that the auditor had concerns about the town being able to continue as a going concern, which means Swansea may have problems meeting its obligations.
In other words, Swansea may not be able to pay its debts, Wasden said.
In the 2008 audit of Swansea’s finances, Rish & Enzastiga, Certified Public Accountants, reported significant deficiencies in the following areas: general ledger, segregation of duties, and monthly fines and fees remittance.
Regarding the town’s general ledger and segregation of duties, significant deficiencies exist for fiscal years 2003 through 2008; while in the area of monthly fines and fees remittance, significant deficiencies exist for fiscal years 2004 through 2008, according to the audit.
If that weren’t bad enough, the town’s fund balance as of Dec. 31, 2008, was more than $500,000 in the red. During all of 2008, Swansea managed to trim just $741 from its fund balance deficit, cutting it to $506,778.
Wasden filed an S.C. Freedom of Information Act request earlier this year to learn how Swansea accumulated more than $470,000 in debt over the past few years. She sought town financial statements, meeting minutes and ordinances, along with other data.
Town officials proceeded to send her a bill for $9,996.25 and requested she provide a deposit of $4,916.25 before it would begin compiling the information requested.
Wasden believes someone in the town should be held accountable for the fact that Swansea officials failed to forward the state its share of fines imposed in municipal court from 2004 through 2007 – mainly for traffic violations – and the community ended up owing $473,251 to the state.
Spires and other town leaders have blamed the debt on bad advice, but an audit of town finances showed that Spires spent the money without authorization from the Town Council.
According to Lexington-based Rish & Enzastiga’s audit, Swansea’s general ledger needs to utilize proper accounting between the town’s general fund and proprietary fund. As of the end of 2008, the town was making entries between funds, which resulted in individual funds being out of balance.
In the area of segregation of duties, Rish & Enzastiga noted that Swansea had not set up a proper segregation of duties relative to cash receipts and disbursements, with the same personnel performing the duties of cashier, posting accounts-receivable records and handling mail cash receipts, among other items.
Without a segregation of duties, errors or irregularities could occur without being detected in a timely manner, Rish & Enzastiga noted.
The problems with the town not filing its fines and fees on a timely basis have been well publicized. Swansea has begun paying down the debt accrued over the three-year period in which fees and fines were not remitted to the state.
It’s not clear what progress Swansea has made remedying deficiencies in the areas of general ledger and segregation of duties.
Reach Dietrich at (803) 779-5022, ext. 110, or email@example.com.