The city of Bella Vista was cited for lack of internal controls in its recent 2012 review by the state’s Legislative Audit Division, the only weakness reported by state auditor.
But information about the issue of competitive bidding protocol, which triggered the audit, was not part of this preliminary report.
The City Wire obtained a copy of the preliminary report which was dated July 24 and sent to city officials Oct. 4. The report will be presented to the Legislative Audit Review Committee at its next meeting on Thursday morning (Oct. 10) in Little Rock.
The report on the city’s financial accounts drew some concern by auditors in terms of insufficient internal controls over financial reporting. While there were no monetary discrepancies found in city’s books, the report cites a material weakness in the city’s control of deposits, disbursements and receipting transactions saying the city needed to more widely distribute those duties among multiple employees.
“The city officials ... did not segregate those duties to sufficiently reduce the risk of fraud or error and properly safeguard the city’s assets, because of limited financial resources,” the report stated.
The auditors consider this lack of internal control a “material weakness” in the city government at this time. The auditors said the city’s financial records are free from material misstatement but the city records do not disclose all the required information pertaining to deposit risks.
The auditors provide no opinion on the facts they reviewed citing the city’s financial statements are in accordance with provisions in the Arkansas Code, noting their concern over internal controls.
The city responded in the report that it will attempt to segregate those duties to the extent possible with its current staff.
The City Wire asked Mayor Frank Anderson and the six council members for comment on the report. Alderman Jerry Snow was the only responder by deadline.
"I haven't had the opportunity to digest the report. However, it is my understanding that Legislative Audit chose not to disclose the results of their investigation. Their inaction does not mean the matter is a dead issue as there have been rumors of a potential 'Tax Payers Litigation' claim and there is possibly law enforcement investigations that I am not privy to,” Snow noted in an e-mail response.
The audit was triggered earlier year when the city attempted to purchase two dump trucks, which came under scrutiny by Alderman Snow who discovered the specifications for the competitive bidding process were skewed toward only one tractor brand – Kenworth.
Snow has publicly raised concerns over “questionable business practices” regarding then pending and past purchases of several dump trucks planned by the city. He said the city “waived the competitive bid process” back in April 2012, which is against state statute and more recently using bid specifications that could only be met by Kenworth.
The city spent $228,952 in April 2012 on two dump trucks and a spreader after they waived competitive bidding when MHC Kenworth was the lone bidder. In April 2013, the city tried to buy more dump trucks, using the same bid specifications from a year ago. Kenworth again was the lone bidder.
Snow continued to question the bid specifications and the city’s request to purchase these tractors without a fair competition for the best price. The council subsequently did not approve the purchase and it has not been reintroduced.
John Leverett, procurement specialist for the Arkansas Department of Finance, said any time the specifications are too narrow that they exclude other manufacturers the bid is out of compliance with state law.
Snow has said his only interest in pursuing the matter is that the proper protocol be put in place regarding competitive bidding in the future because that’s what the citizens of Bella Vista deserve.