DeFuniak Springs City Council Oct. 30 meeting focuses on financial audit report


The DeFuniak City Council held a special meeting on Oct. 30, 2023, at the DeFuniak City Hall to discuss the Fiscal Year 2022 Draft Audit. The meeting lasted about 67 minutes. 

Mayor Bob Campbell spoke that he had an issue years ago with an audit where he was blamed for things. He said that they cleared him of wrongdoing. As a result of that, the council made a resolution that if there are any letters that come in from any government agency, that it would go to the clerk, that would make sure that the manager has a copy, that the attorney has a copy, and whoever it’s directed to, plus the council. He continued that last Wednesday [Oct. 25] was the first time he’d seen a certified letter addressed to the “mayor” that had been sent in September of 2022. He said “If you get a certified letter to the mayor, the mayor ought to see it. And then there were emails from the State Auditors that went to two or three people here that I never saw that either.” 

Interim City Manager Mike Barker spoke and relayed the calendar of events that led to the point where things are now. He said that “the audit is for the year 2021/2022. Ms. Debra Gibson, who was the finance director, had left in June of 2022. Thomas Howell Ferguson P.A. CPA had been hired to come in and complete the reconciliation by the end of September. In January of 2023, a special meeting was held to discuss the functions of the finance department. Guidance was to increase staffing in the department and Morgan Hulion was appointed interim Finance Director. In May of 2023, she was voted in as Finance Director. Feb. 27 of this year I started working for the city. Ever since that time, we’ve been cleaning up a mess in a variety of different areas and that continues until this day.”

Barker then called Ben Kincaid with Carr, Riggs & Ingram and asked him whether, “on the 12 items that are referenced in the audit if [they] could provide sufficient documentation to Warren Averett by the end of the calendar year.” Kincaid answered that he could fulfill the requests. Barker then asked if he had seen anything that was missing, or “grossly negligent or horrible” that would be a serious detriment to the city. 

Kincaid said that in the scope of what they’ve been doing, which is primarily bank reconciliations for this fiscal year, “we have not seen anything that would lead us to believe that any of those exist. We have found errors or adjustments that we’ve proposed to the city.”

Barker continued, saying that the city now has an accountant on board that started the first of October. And that, “we’ve communicated with the AG’s [Attorney General] office that we would give them an update by November 17.” 

Kevin D. Bowyer, CPA, CITP, CISA, CDPSE, of Warren Averett spoke and introduced Angela D. Balent, CPA as their quality control review partner for the city of DeFuniak Springs. Bowyer explained the reason for his opinion on the 12 items, outlined in a document he presented.  Council member Amy Heavilin asked if his disclaimer of opinion would change. Bowyer said if they received the information they needed that could be verified, then the opinion would change. She then asked about a Nov. 17 deadline. 

City Attorney Clay Adkinson spoke: “That is the date we have to provide the state with a response to our stats.” 

Heavilin said that her concern was that the disclaimers would weaken their position to borrow money, get grants, etc.. Her next concern is that “we are working on [20]22 and [20]23 is due. And I heard last evening we’re still in April. We still haven’t recorded transactions from April of 2023 through this period in September.” 

Adkinson replied that he didn’t think they [Warren Averett] could talk about it as it has not been assigned to them yet.

Heavilin then asked when a finished product would be presented. Angela D. Balent responded that it is very difficult to say definitively, it’s all based on the quality of evidence that city personnel and Carr, Riggs, & Ingram are able to assemble. It may be that not everything on the list can be assembled. Based on a preliminary view, that is the assumption or intention. She continued that it would be a minimum of 40 hours of work. “Best case scenario, the end of January, but I do not want to make that commitment to this council,” said Balent.

Mayor Campbell spoke, “In the 2012/13 audit, we were late and by the next one we were late again and ended up firing that finance director. The next year, we were late again and went over their threshold and they were talking about withholding the half-cent sales tax. Then by the end of 2017 we find out that they really did withhold some of the sales tax money, about $110,000 for each year, and that was back then.” 

Heavilin continued, asking “how comfortable [are they] that the reserves as they are stated in the financial statements, committed, unspent, unassigned, reserved, and the general whatever is left over. 

Boyer responded that the overall cash balances are correct but it all flows into equity. 

Council member Todd Bierbaum asked if any cash was missing, and Boyer replied that nothing is missing. 

Heavilin stated that “one of the things written in here is that we don’t have good, proper, internal controls. She added that she saw one of the items here with transfers is $6 million out of the sewer fund, but yet in this current year there’s zero. 

She commented, “This stuff is alarming to me because when staff makes a transfer, or pays a bill, or pays a receipt, they’re not recording it in the general ledger. They’re just doing it and we find out about it because of the bank statement?” 

Boyer responded that his understanding is with the work that Ferguson and Carr, Riggs, and Ingram did is the entries were being made to reflect the proper cash balance to get the bank account reconciled, but the corresponding transactions weren’t necessarily getting recorded.

Heavilin said that was concerning to her because that means that equity is off, which means the city’s reserves, numbers are not accurate, which means “we’re relying on this and that leads to a bigger problem which is cash flow. We could potentially be using monies in our checkbook to pay our bills that belong to a specific issue to pay our current liabilities. I have a problem with that especially how far behind we are already.” 

Her next issue was with page 45 [of the report], compensated absences, additions and reductions. Both were the same, $54,457. She asked if that was an error. 

Balent responded that “it was not an area of high risk.” Heavilin then asked about the $400,000 on Page 2 of their report. 

Boyer replied that it was related to the health reimbursement account and that he needed more information to determine if it truly is a prior period adjustment or if there’s any other adjustments that need to be made to that account. 

Heavilin asked, “What is the $72,000? The cash balance is off by $72,000. Does that mean that our general ledger cash balance is short?” 

Boyer responded that “there were a couple of components to that, one that you have a cash balance that’s managed by a third-party administrator, and you also have a liability to offset the cash balance. The cash balance reported by the TPA didn’t match the cash balance in the general entry.”

Heavilin asked about the proprietary funds, that the airport has been included in them even though the amount of money has increased greatly, and why the airport is being rolled into the general fund. 

Boyer responded that it was the prerogative of the city to make that decision. She then made a motion to bring in the State Auditor General to do an audit. Attorney Adkinson asked if she meant the Inspector General or the Auditor General? She said it would be independent and free and would put a lot of questions from the public to rest. 

Adkinson said that by Nov. 17 if the council wants to include that in their letter they could do so. He said that was something the joint legislative audit committee would be taking up and that the State Auditor General would not be talking to the council at this point in time because they are required to not already be doing business with the city or they would lose their independence. 

Heavilin responded that she amended her motion to be after Nov. 18. Adkinson replied that the council can ask but they may say they not able to provide any assistance or commitments until the council understands whether it will be passed by the state.

Bierbaum seconded the motion for discussion. Council member Anthony Vallee commented on  “what kind of burden that would put on our staff. I don’t see how that could possibly not tax staff when we’re trying to finish up two other audits and the idea that we would be saving time and move forward faster by making them do something else doesn’t really jibe with any sense of reality as I understand it. I mean, how is this not going to interfere with that?” 

All voted Nay except for Heavilin. 

The downloadable Draft Audit report, 81 pages in length, can be accessed from the city of DeFuniak Springs website,, via the link “Agendas and Minutes,” under “City Council Agendas,” and the date “103023” The agenda form contains a link to the report.