In a special session Friday afternoon, the Neosho City Council unanimously approved an agreement with BKD, a Joplin accounting firm, to review the city’s finances.
The firm will look at bank account records dating from Oct. 1, 2009 until Jan. 31 of this year, as well as analyze certain general ledger accounts related to the bank accounts and prepare adjusting journal entries based upon the above analysis that require management approval.
The above services are all part of what the company has deemed as “Phase I” of the process, with these services estimated at a maximum of $6,000, as the company would charge $150 per hour for an estimated 40 hours of work.
But part of the services requested by the council is a review of a city financial plan developed by Jan Blase, the recently suspended city manager. In that document, Blase indicated the city needed to borrow an additional $1.3 million to pay off existing city debt and ease the current financial crisis.
As part of the approval, the council stipulated a cap of $10,000 be placed for the company’s services. This will ensure the completion of the services indicated in the first phase, as well as pay for additional services the council may request, including review of the financial plan.
“Does that $1.3 (million) number still work today?” Mayor Pro Tem Richard Davidson asked. “Is that the obligation the city still has? I’d rather spend more here to make sure the $1.3 is right. In that light, $10,000 is a small thing.”
BKD, formerly known as Baird, Kurtz & Dodson, said they will invest eight hours of consulting time at no charge to assist with the identification of other services they can provide.
The firm is looking at reconciling bank records beginning last October as an audit of the city, conducted by Davis, Lynn & Moots, a Springfield-based accounting firm, covered bank statements from Oct. 1, 2008 until Sept. 30, 2009, the city’s 2009 fiscal year.
According to a Feb. 1 letter from BKD to Dave McCracken, acting city manager, the arrangement is not intended to be an audit, nor is it designed to “prevent or discover errors, misrepresentations, fraud or illegal acts.”
The company will use information furnished by McCracken, city employees and city representatives, as well as info from generally recognized public sources.
