Date: 4/28/08

To: Town Council

Cc: Mayor Smallwood, Gary Armstrong

From: Chrystal McGlone, Town Clerk

RE: Status Report

I just wanted to let the Council know what is currently taking place in Town Hall. The audit exit interview was conducted yesterday and the draft reports are in the packets. I wanted to thank the Council for their support through this hard time. Mr. Raposo stated he is going to contact Mr. Jeffries himself regarding the "missing money" to resolve his concerns that were brought up during the last meeting. The auditor's office and Toni Nelson confirmed yesterday during the Exit Conference that there isn't any money missing, just bad
bookkeeping. Thank you to all that attended.

We are not bringing forth any budget amendments until June but are monitoring the budget closely. We are keeping track of the budget amendments that are needed, however more information is still needed in order to perform them. Most Cities and Towns only do budget amendments once or twice a year at the most.

I will have a BIAS Treasurer's report for the month of March for everyone on Monday.

Please feel free to call me with any questions or concerns you may have.

Project Report Toni Nelson

SMALL CITY ASSISTANCE
PROJECT REPORT

CITY/TOWN: City of Eatonville (MCAG #0578)

DATE(S) OF SERVICE: May 15-17, Aug 30-31, Oct. 246, 2007

TRAINING HOURS PROVIDED: 45.5 hours

INDIVIDUAL(S) ASSISTED:  Chrystal McGlone, Clerk
                                                      Gary Armstrong, City Admin.
                                                      Tom Smallwood, Mayor

BRIEF DESCRIPTION OF ASSISTANCE:

May training and assistance sessions was devoted solely to the reconciliation of the 2006 financials for the purpose of preparing the 2006 Annual financial report. Posting errors from the prior Clerk continue to plague the city in their effort to reconcile financials to the City Treasurer reports and to bank statements.

Effective January 1, 2007 the city purchased new software programs for their Utility systems, Accounts payable, accounts receivable, permitting and budgetary controls. August assistance was to assist the Clerk in reconciling the software conversion to provide assistance in the proper methods for investment activity in the new software program.

October site visit was to assist the city in understanding their cash flow issues and what steps needed to be taken to assure legal compliance. The city has multiple public works projects that have drained all available resources. Many of the grants are reimbursable grants that have caused cash flow issues for the city. In addition, the city has not released all of the revenues projected in the 2006 and 2007 budget thus reducing all unrestricted reserves. A joint meeting with city staff, administration and council members along with
Audit Mgr., Mark Rapozo to held to answer any questions.

RECOMMENDATIONS:

#1 Interfund loan from Sewer and Electric utility funds to cover cash shortfalls in the general fund (001), street fund (101), water fund (401) and Storm Drain fund (450).

#2 Increase water utility rates to meet utility m & 0 costs, plus debt service, plus future capital needs.

#3 Water utility fund needs to remit "Admin" costs to General fund as per budget.

#4 Obtain councilmanic loan to cover the police vehicles purchased in 2007. This will allow for an increase in cash. (the city did not have sufficient cash reserves to support this expense).

#5 Obtain councilmanic loan for street portion of Public works project to cover retainage due and payable to the contractor at the end of this project.

AUDIT TEAM REVIEW: There is nothing further at this time. The audit team has been kept appraised [sic] of all communications between the assistance program and the city.