City cited 5 times in audit for 2004

The finance director says the city is working to improve its operations.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- The city spent more money than it had budgeted in a number of funds, failed to report its year-end balance in a timely manner and didn't properly monitor those receiving Community Development Agency funds, a state audit says.
The audit lists five noncompliance citations and 17 recommendations to improve the city's financial operations. But the state audit of Youngstown for the year 2004, released Thursday, doesn't include any findings for financial recovery.
"Generally, it's a pretty clean audit," said city Finance Director David Bozanich. "There are areas we need some improvements. We understand that and we're working on it."
Among the noncompliance citations is the need for the finance director to certify the availability of funds before they are spent. Of the 60 expenditures examined by the auditor's office, the city finance director certified 12 of them.
What's permitted
Cities aren't permitted to spend money unless it's been properly appropriated, and they can't spend more than what is budgeted for each fund, the audit states.
The auditor's report states the city spent more money than it had budgeted in 34 funds in 2004.
Also, the city transferred money from one fund to another nine times in 1994. State law requires the prior approval of the tax commissioner and/or the county common pleas court before a city can transfer money.
Bozanich said the city should have used the word redistribution rather than transfer because no permission is needed to redistribute money. "It's a linguistic issue," he said.
One noncompliance citation was for the city CDA's failure to conduct on-site monitoring of work done with CDA money. All of the CDA expenditures were reviewed before they were reimbursed, but there were no monitoring reports on the projects funded by the agency, the audit reads.
The city also was supposed to certify all sources available for expenditures and unencumbered year-end balances to the county auditor on or about the first day of the year, the audit reads. Youngstown didn't do that until March 25, 2005.
Performance bonds
Another noncompliance citation was for the city's failure to carry separate performance bonds for the mayor, law director, president of council and the seven council members. The audit states the city should have separate bonds for those officials instead of a blanket surety bond.
After articles about that problem appeared in The Vindicator a few months ago, the city purchased bonds for the mayor and law director. After checking with its insurance broker, city officials said a blanket policy for the council members and president was equivalent to performance bonds.
Some of the auditor's 17 recommendations were mentioned because current city policies could lead to financial problems.
At the water department, the chief utility clerk and the analyst programmer have access to override the billing system to make changes to customer bills. But the auditor's office could find no documentation that shows a supervisor reviewed the adjustments to make sure they were done properly.
Also, records of accumulated time by police officers and firefighters aren't kept at the city finance department, something that "could lead to inaccurate payment of accumulated" time when someone leaves city employment, the audit reads.
skolnick@vindy.com