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Editorial: Audit gives good report on city's finances

Saturday, February 2, 2002

The Cape Girardeau City Council had the opportunity last month to study an independent audit of city finances.

The 123-page report is intimidating to those not accustomed to eyeballing financial statements and balance sheets. However, even the most amateur eye would consider it to be a thorough review of the city's coffers.

And the review statements on page 121 are clear: "No instances of noncompliance material to the financial statements were disclosed during the audit," and "the city of Cape Girardeau, Mo., was determined to be a low-risk auditee."

But there it was on page 122, the city's sole weakness.

The investment board couldn't seem to get together for a meeting.

The board is composed of four members: city finance director John Richbourg plus three other accounting experts who aren't in the banking field. Because they don't work for any financial institution, members are expected to be unbiased in investment strategies.

But that caveat sometimes makes it difficult to attract and retain members on the investment board. As a result, when some of the investment board members resigned, there wasn't a quorum, and meetings couldn't be held.

The audit has pointed out this problem for two years running and has emphasized the danger of missing quarterly meetings.

"Noncompliance with internal controls could result in losses of city funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets or imprudent actions by city employees," auditors wrote.

But it looks like things are on the upswing for the investment board.

Three new members have been appointed: Ivy Locke, vice president of finance for Southeast Missouri State University; Rob Huff, business manager for the Cape Girardeau School District; and Tony Balsano, controller at St. Francis Medical Center.

And a year's worth of quarterly meetings already are slated so that members have early notice and can adjust their schedules accordingly.

This is admirable, and people who give up their time for the city's greater good should be applauded.

On the other hand, it is noteworthy that the worst financial violation in the audit is that a board doesn't meet enough.


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