The City of Beaumont closes their fiscal year on June 30th . Closing the year simply means all revenue and expenses are tallied. This process usually takes a few weeks and although there will be a few random receipts that must be recorded after the 06/30 deadline, most of the transactions are made in the fiscal year.
In the middle of April, 2012 the City of Beaumont recorded transaction # 207206 and dated this transaction 06/30/11. There are over 300 entries coded to transaction # 207206 that range from $0.00 to over $1/4 million. Some of the entries are double or repeat of the original closing number and some don't seem to have any basis for their existence. I found the 207206 transactions in 24 different funds, 7 of which are not on the budget.
01 – General Fund: The General Fund account has dozens of entries. Cash entry is plugged in at $54,745,753.38 and the Cash-Interfund is $63,943,957.17. The City twice coded $11,242,073.41 to 'Unreserved Fund Balance' claiming to have a total of $22,484,146.82 in unreserved funds.
02 – Gov Access TV: This fund only has two entries, but it is a double entry of $49,369.06 coded to 'Unreserved Fund Balance' for a total of $98,738.12.
03 – Gas Tax: This has an entry of $4,862,145.79 transferred in from the General Fund and also has a double entry for 'Unreserved Fund Balance' of $1,006,064.59; which would total $2,012,129.18.
04 – AB2766: This fund records a Interfund transfer of $63,028.76, but the Cash is listed at $118,849.33. This leaves a discrepancy of $55,820.57. This fund also has a double entry for Unreserved Cash Fund of $27,308.58 to total $54,617.16.
05 – Not on Budget: There is no listing for this fund and there is no other journal entries listed under this fund except for the two 207206 entries which record $1,771,707.26 transferred from the General Fund and an Unreserved Fund Balance entry of $0.00.
07 - CDBG Fund: This fund recorded $411,613.35 transferred in from the General Fund and recorded Unreserved Fund Balance at $0.00.
08 – Bike & Pedi: This listed Cash at $75.76; Cash Interfund at $10,812.01; Due from Other Govt. Agencies at $142,142.03; and double recorded Unreserved Fund Balance at $.08.
10 – Sewer Service: This fund has the most unbelievable discrepancies. Transaction 198148 records the 1st 06/30/11 entry to 'Cash with Fiscal Agent 2001 Issue' at $1,274,332.58.
Transaction 207206 removes $4,155,903.58 from the account. A $1,102,000.00 is added under 'Note Receivable' with transaction 207206 and removed with transaction 217207 dated 06/30/12. Land is plugged in at $502,560.06. An entry for Equipment is listed at $69,163,584.11. The Unreserved Fund Balance is entered twice at $51,469,503.73.
12 – Not on Budget: This fund has only bonds and debt listed. There are 17 for 'Trustee Issue' with date ranges in the memo from 2004 – 2009. The original 06/30/11 entries are small amounts, but the 207206 entries are in the millions. For example: 2004A Issue 1st 06/30/11 entry is $12.84, but the 207206 entry is $397,038.53. The total added to the bonds is over $15 Million. This fund also has an entry coded to 'Investment in CFD Bonds' for $207,985,804.87 and the entry 'Due to Bondholders' $225,855,496.15.
14 – CFD Fund: The City recorded a 'Cash Interfund' transfer of $76,109,648.03 – which is impossible when the total transfer amount from the General Fund was $63,943.957.17. This department lists 13 more bonds with a total 207206 entries of $2,717,890. It also double enters the Unreserved Fund Balance at $24,263,353.98.
19 – Not on Budget: This fund is not listed on the budget, but it is where they account for the 'Charity'. There are a total of nine 207206 entries that remove funds from this department.
31 – Not on Budget: The only listings under this fund are the 207206 money transfers of $90,741.00.
35 – Mitigation Fund: This listed a Cash entry of $16,409,862.69, a Cash Interfund of $17,123,788.880, and a double entry of $8,290,725.63 coded to Unreserved Fund Balance
36 – RDA Capital Projects: 207206 entries added $17,123,788.8 to Cash Interfund; $85,990.00 to Note Receivable; and a double entry to Unreserved Fund Balance of $4,360,657.16.
37 – RDA Debt Service: This has a Cash Interfund of $15,796,555.81; Account Payable $645,569.25, and a single Unreserved Fund Balance of $56,242.64.
38 – RDA Low/Mod Housing: This fund received a Cash Interfund of $1,908,229.02 and a double entry for Unreserved Fund Balance of $1,387,404.04.
39 – Not on Budget: There have been 23 entries coded under fund 39 in the last two years. Most of checks issued to 'Beaumont-Cherry Valley' & “Christensen Brothers Engineering'. The other three entries are 207206: Cash - $874,771.22, Cash Interfund - $156,411.81, and Deposits - $718,359.41.
40 – Transit Fund: This fund has only two 207206 transactions: Cash - $4,719,117.19, and Cash Interfund - $4,492,567.72
43 – Vehicle Maintenance: This fund adds $202,034.23 to Cash Interfund, repeats the original 06/30/11 entry of $6,907.55 for Accrued Payroll, and attaches $45,657.86 to Sick/Vacation Benefit Liability. Vehicle Maintenance is listed on the Budget as Department 5050, but does not list the department in the detailed budget. The State Controller's Office lists two employees in this department that make less than $60,000/yr. It is not likely they have accumulated $45,000 is sick leave.
The 207206 transaction recorded a total of $213,669,257.10 in 'Unreserved Funds Balance'.
When questioned about the internal audit the response from the City has been: “We did a GAAP Audit”.
It is true that a GAAP Audit was completed, but page two of the Audit clearly states “material misstatements' and 'do not present fairly'. I originally thought the 207206 plugs were done after the GAAP audit, but the GAAP Audit is dated 08/01/2012.
The City of Beaumont states that they 'had an audit', but what they are not acknowledging is that they flunked the GAAP audit.