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Cape Coral’s latest financial report pulled from Monday agenda

By Staff | May 5, 2012

Cape Coral City Council will discuss its latest Comprehensive Annual Financial Report but it won’t be Monday.

That item was withdrawn from the agenda late Thursday, shortly after the CAFR was received and made public via the city’s website at capecoral.net .

Among the highlights, the 192-page document discusses some non-compliance issues the annual report outlined last year and how the city addressed – or didn’t address – those issues. It also outlines some new areas of discussion.

Most of the items were systemic in nature, or oversights and, according to Councilmember Lenny Nesta, the mayor withdrew the report from the agenda simply to give council some time to consider it.

“We just got the hard copy. We need some time to digest it,” Nesta said. “It’ll be back on the agenda next week.”

According to the audit dated Sept. 30, 2011, there were four areas of non-compliance with the city’s investment policy identified from the previous year.

The two areas which had not been resolved were:

– The requirement to establish written procedures for the operation of the investment portfolio, and a system of internal accounting and administrative controls.

– the requirement to periodically perform cash flow analyzes to ensure the portfolios are positioned to provide liquidity.

Those have been resolved.

Among other issues the audit outlined, that also were remedied, were:

– Utility billing Revenue Reconciliations

– Utility Billing Allowance for doubtful accounts

– Utility Billing software

– Capital assets

According to the new report, those items not adequately addressed by the city included:

– Grants

The recommendations to improve financial management included:

– Procurement of accounts payable process internal control enhancement

– Internal control over authorization and use of purchasing cards

The CAFR also indicates deficiencies and weaknesses according to another audit, which include:

– Misstatements not prevented or detected by the city’s system of internal control caused by a year-end closing process not adequately performed, which could affect the ability to detect misstatements in a timely fashion.

– Misstatements in the Schedule of Expenditures of Federal Awards (SEFA) in testing, which caused it to be updated several times, since adequate closing procedures were not in place, leading to inaccurate information.

The audit of the CAFR also found some systemic errors and other oversights.

City spokesperson Connie Barron said some may look at the report and find it critical but as a whole, there’s not much to get excited about this go-around.

She also acknowledged that the report is complicated to digest.

“If you’re not a numbers person and have no understanding of government finance, it won’t make sense to you. It barely makes sense to me,” Barron said.

The annual report has had its critics every year with the city perennially answering, clarifying and correcting most of those criticisms.

Barron added that those who don’t understand it likely may still find a way to slant the results in a direction that suits them.

“It gets co-oped and put into the perspective of how someone wants it,” Barron said. “They see a $145 million cash balance and say ‘Oh, my God. They’re hiding money’ when it’s not true.”