One improvement, one problem in Mountain City audit

A "significant deficiency" in Mountain City's financial reporting has been fixed after nearly two decades. Each year, the Office of the Tennessee Comptroller of the Treasury releases an audit report for the Town of Mountain City. At the end of each report, there's a list of findings and weaknesses in Mountain City's bookkeeping that need to be corrected. Since 2007, one finding has stayed on every Mountain City report: "Use of Accrual Accounting." But last month, the 2024-25 fiscal year was released, and the finding was labeled "corrected." Accrual is when an organization records its income when they earn it or records an expense when it incurs it. This is opposed to recording income and expenses when money officially exchanges hands. There is nothing inherently wrong with accrual accounting, but City Recorder Audra Gerty said the town's old accounting software made it "very difficult to properly record accruals." Therefore, auditors had to make corrections for Mountain City each year. In April 2023, Mountain City updated to a new software. "Each year we've gotten better, but this is really the first June 30 audit where the auditors didn't have to go in and make a lot of corrections," Gerty said. There were no new findings in the report. However, there was one ongoing and uncorrected finding from 2023: purchasing. "We noted several instances of credit card purchases where purchase orders were not issued in accordance with town policy and a lack of proper supporting documentation," stated the report. The town's policy is that whenever a purchase of $50 or more is made with its credit card, a purchase order must be issued. "There are certain vendors that it's easier to deal with when you pay by credit card," Gerty said. "But because of that convenience, it's easy for our department heads to forget to ask for a purchase order to be issued, or for our staff to do that when they order something online." Gerty said the town plans on correcting the finding by "taking our time and working with the department heads." She said it would also help to raise the $50 threshold, which would require the Board of Mayor and Aldermen to vote on an amendment to the town's purchasing policy ordinance. Overall, Gerty said she was pleased with the outcome of the audit, considering the town's acquisition of the Cold Springs water district earlier in the fiscal year and the chaos of Helene. "I'm super proud of our staff that we made these improvements, and we keep making improvements," she said. "We deal with many people, hundreds of transactions every day, and they do such a great job."