Summit’s finances are in good shape, but auditors found that the town’s fiscal operations aren’t perfect, a CPA told town officials when presenting the annual audit report on Tuesday.
Material weaknesses found in the audit included a “cafeteria” wellness plan that didn’t comply with pre-tax regulations, a lack of segregated duties among town clerks who handle money, a need for better management of fuel cards and more internal controls to keep spending in check.
Tommy Lindley of Haddox Reid Eubank Betts, the Jackson firm that conducts the annual audit, said the cafeteria plan sold by ACL Wellness, which the town allowed its employees to sign up for in 2016, “did not meet legal requirements.”
Its costs were supposed to be paid before employee taxes were withheld, and the people who sold the plan to the town said it would pay for itself in that regard.
But that didn’t happen, and the town received a letter from the IRS saying it owed money.
ACL Wellness, meanwhile, seems to have dissolved. Its website was taken down and insurance agents who had been affiliated with the company said they no longer sold the plans when contacted last year.
Lindley said town officials plan to comply with state and federal taxing authorities and make sure future cafeteria plans meet federal tax requirements.
Mayor Percy Robinson, however, said that won’t be an issue as the experience with ACL has made him gun-shy about cafeteria plans altogether.
"We had somebody come in here the other day with a cafeteria plan and we ran them out the door," he said.
As for the other matters, Lindley noted that in a perfect world town hall would have more employees overseeing finances, handling separate duties related to money and serving as a check and balance of each other. However, that’s not in the budget and remains “a recurring a deficiency” in annual audit reports.
He also noted that the town “has not adopted an adequate policy regarding fuel card purchases” and recommended that a card be left in each town vehicle and the mileage recorded during fill-ups. Robinson said he recently sent a memo to department heads regarding fuel card usage.
Lindley also said the town should establish controls to prevent future disbursements in excess of the budget.
Overall, Lindley said the town is financially solvent, taking in $1.3 million in fiscal year 2018 and spending $1.2 million. The water and sewer fund had a balanced budget of $600,035.
Including certificates of deposit, the town has a cash balance of $2.4 million.