Awendaw’s Missing Money Partie Deux

Awendaw Accounting, Lack of Controls, Audits

Awendaw Accounting, Lack of Controls, Audits

By Paul Gable

The Awendaw Town Council received an audit report in January 2011 with auditor Howard Nichols’ opinions of the town’s finances for fiscal year 2010 (July 1, 2009 – June 30, 2010).

According to a source with significant knowledge of the town’s finances who spoke on conditions of anonymity, Nichols had done audits of four prior years, all at the same time, after the S.C. Municipal Association had gotten the town’s financial records in order. The town, reportedly, had not had audits performed on an annual basis since the 2002-03 time frame.

Mr. Nichols reported nine significant deficiencies with town records. The lack of documentation and the lack of internal controls led Nichols to issue an adverse opinion on the audit.

According to the source, 41 percent of the town’s transactions were not approved with 30 percent of the funds spent not approved, a sum of over $200,000, according to our source.

One statement in Nichols’ report said, “The lack of controls over the management of expenditures increases the Town’s risk of financial loss. Due to lack of controls, money could be diverted to personal use without the approval or knowledge of management.”

As part of the discussion about Nichols’ audit, it was noted the fire fund payment was not made and the money was not there to pay it. Nichols said the only way to determine if fraud had occurred was to have a “forensic audit” done. The council decided it did not have the money to have a forensic audit completed.

After that decision was made, one town official reportedly contacted SLED and the FBI in order to get some answers. According to the source, neither agency decided to pursue an investigation, after looking at the audit report, because the lack of record keeping on the town’s part meant they could not determine whether expenditures were valid or not.

A town official recently told a media outlet that no money was missing from the town, even though a required fire fund payment has not been made.

Actually, this problem dates back several years. Over $200,000 of town money was spent without sufficient documentation to determine where the money went and the town has been trying to play catch-up on the fire fund ever since.

Maybe that doesn’t indicate missing money to town officials, but, the money is gone and required payments have not been made.

Nichols Awendaw Audit Recommendations [PDF]

Awendaw lacking audits – Post & Courier
Jessica Johnson – Posted: Saturday, February 23, 2008 12:01 a.m. 

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