By Susan Pietras-Smith
For the second fiscal year in a row, the town of Colonial Beach received an audit with a “clean opinion.” A clean, or unqualified, opinion means that the numbers presented in all reports were correct. The external audit was conducted by Brown, Edwards & Company L.L.P of Harrisonburg for the 2012 fiscal year which ran from July 1, 2011 until June 30, 2012.
Council member and budget committee chair, Mike Ham, along with town manager, Val Foulds, and other town staff, have been working with Brown, Edwards & Company for a number of months on the audit, which is required by the federal government due to the fact that the town, and Colonial Beach Public Schools, receive federal funding.
A complete audit of 50 percent of federal funds is required because the town is considered a high risk auditee, for various reasons, including the small number of employees in town. When an organization has few employees, there can arise “segregation of duty” issues.
Segregation of duty makes it so no single employee, or single group of employees, are in a position to commit fraud and are able to conceal the fraud on their own. In a small town work force, town employees wear many hats and oversee multiple items and monies. As there are fewer checks and balances in this situation, it would be easier to hide fraudulent activities without a deeper audit. Council member, Gary Seeber, asked Brown, Edwards & Company if hiring more employees would bring down the risk rate. The company stated that it would cost more money to hire enough employees to bring down the risk than it costs to have the more extensive audit done each year.
Cases like that of Barbara Worrell, former finance director of Colonial Beach Public Schools, who is serving a two year, eight month prison sentence due to embezzling funds are the reason Separation of Duty is important. From 1997 until 2009, Worrell embezzled $274,793.97. It was only when School Board Chair, Timothy Trivett, noticed a voided check written to Worrell, in a cafeteria account, that her crimes came to light.
All audit findings will be available on the town’s website: colonialbeachva.net.
Also at the special November council meeting was the discussion, and passing of Resolution 57-12. Mayor Fred Rummage, Mike Ham, Gary Seeber, Jim Chiarello, and Tommy Edwards were present for the vote, while Tim Curtin arrived, from his job, just following the meeting. Resolution 57-12 awarded the contract for the rehabilitation of sewer and water lines to G.L. Howard Inc.
The contract totals $3,236,884.00. There were a total of three bids on the contract. Walter C Via Enterprises submitted a bid of $4,247,415.00 and W. C. Spratt Inc for $4,998,090.00.