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Thursday, December 18, 2014
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With audit filed, AURA is able to access its grants

Friday, January 03, 2014 - Updated: 11:03 AM

By ALISSA SCOTT

alissa.scott@recordernews.com

Now that the city of Amster-dam has filed its single audit of federal funds, the Amsterdam Urban Renewal Agency, whose accounts had been frozen for several months, is back under normal operations.

The agency, however, has decided it will follow a new procedure so it can avoid the inability to access its grant money.

Due to a state comptroller's audit critical of city bookkeeping practices, which was released in October, AURA was restricted from grant money it had previously received form the state.

"The city and the agency have had all their audits done together," AURA consultant Nick Zabawsky said. "That's not going to work any more."

Zabawsky said AURA will file its own audit with the state for its federal funds.

"We're going to run on a different timetable than the city," he said. "That's going to have to be that way from now on."

Zabawsky said beside the same bookkeeping issues the state said it found with the city's audit, he said everything came back clear.

"In the federal funds, there were no findings," he said. "There were some issues with bookkeeping procedures, but the way we administer grants was taken care of properly."

Even though its funds were frozen, Zabawsky said the agency continued to have access to a pot of nearly $160,000.

"Fortunately, we have a revolving loan fund," he said. "We paid contractors and other vendors out of our revolving loan fund with the hope that the grants would be approved soon."

He said if the agency didn't have that system, it could have created tension between itself and local vendors and contractors and given the city a bad reputation.

"The agency can't go and hire contractors and then not pay them," Zabawsky said. "People have to be paid."

Once the city filed its single audit and AURA's funds were unfrozen, the revolving loan fund was replenished.

Zabawsky said because of this, no projects were interrupted.

"Because we have the revolving loan fund, our projects weren't held up," he said. "But, we did hold off on signing new contracts during that period when the funds were frozen because, well, we didn't know how long it was going to last."

Zabawsky said the contracts being held have now been signed and contractors are going to work so the agency is happy.

AURA still has an additional audit it needs to file, one Zabawsky said is "several months overdue."

In November, Zabawsky said the Authority Budget Office sent the agency a letter stating it is not in compliance with authority budget acts and, essentially, the office wanted an explanation.

"The problem is that our financial statements have always been a part of the city's statements," Zabawsky had said. "Our audit a part of their audit. But, there's no clear indication as to when [the city's documents] will be complete."

But, it should be complete soon.

"The city has to file the single report for the federal funds," Zabawsky said, "but the urban renewal agency has to file its own audit one and submitted with the New York state budget office. That audit is not done yet, though the hope is any day now."

The Office of the State Comptroller released its draft audit of the city's finances in October. The document indicated that because of the lack of accurately recorded figures, the city's financial picture is cloudy.

It explains that for the past four years, officials have been working with inaccurate accounting records to craft the city's budgets and there is no way to determine if all income was deposited into city accounts.

Auditors said attempts at reconciliation were unsuccessful in many cases.

The city also submitted its annual update document nearly one year late. It showed nearly half of City Hall's bank accounts cannot be reconciled and that $1.2 million is unaccounted for because of poor bookkeeping.

     

Comments made about this article - 1 Total

Posted By: On: 1/3/2014

Title:

"Fortunately, we have a revolving loan fund," he said. "We paid contractors and other vendors out of our revolving loan fund with the hope that the grants would be approved soon."
Isn't that what's called "co-mingling of funds," something for which the city controller's office was severely criticized by the state?

Isn't that what's called "co-mingling of funds," something for which the city controller's office was severely criticized by the state?" />

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