In the wake of the discovery that city staff left millions of dollars in city funds uninvested for more than 18 months, the Lawrence City Commission should seek a thorough audit of the city’s financial practices.
The audit should be by an independent firm the city has not previously used. Though costly, such an audit may be the only way for the city to identify other instances of financial and accounting mismanagement — past and current — that are costing taxpayers.
The latest issue involves the former Farmland Fertilizer Plant. The city took ownership of the plant in 2010 with the plan of using part of the 467-acre site for its new business park, VenturePark. The city paid nothing for the property and received an $8.6 million trust fund to pay for remediating decades of nitrogen fertilizer spills that contaminated the groundwater. The city accepted full responsibility for the cleanup, which was expected to cost $13 million.
The plan was to use interest earned on the $8.6 million trust fund to close the gap between the trust fund and the cleanup cost. But there were two problems — first, the city grossly overestimated the interest earned, and second, it was recently discovered that about $4.6 million in trust fund money was placed in an account that didn’t bear interest.
The funds went uninvested for all of 2016 and most of 2017, Finance Director Bryan Kidney said. A city memo states money was not re-invested after it reached maturity in December of 2015, which Kidney realized during the financial audit of fiscal year 2016.
Assistant City Manager Casey Toomay blamed the problems on employee turnover and annual, instead of monthly, accounting practices.
The Farmland problems come a few months after the city discovered hundreds of thousands of dollars in lease payments had gone uncollected because the city never billed its tenants. In June, an audit by RSM Global revealed that at least 10 city leases had gone unbilled for years. RSM Global, said poor recordkeeping, insufficient employee training and a lack of oversight caused payments to go uncollected by the city.
The city’s stumbles are disconcerting and rightfully have shaken taxpayers’ confidence in the city’s financial practices. City commissioners should act quickly to find and fix any other issues the city made have.