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March 18, 2013

New Albany audit takes issue with purchases, payments

Attorney says city followed state rules

NEW ALBANY — A state audit of New Albany’s 2011 financial records questioned the purchase of two fire trucks, payments for legal counsel and the reconciliation of bank accounts during Mayor Doug England’s last year in office. 

The New Albany City Council and Redevelopment Commission approved, with the backing of the England administration, the purchase of the two fire trucks using tax-increment financing funds. The trucks were purchased for $410,000 each, and the council and commission elected to buy them with available TIF funds instead of financing the deal. 

However in its audit released to the public last week, the State Board of Accounts questioned whether TIF funds could be used for purchasing public-safety equipment. 

Property taxes garnered from TIF districts carry specific regulations on how they can be spent. The state legislature has made changes in recent years to TIF rules, but generally projects funded with tax-increment revenue must serve the district from which the levies were collected. 

Current City Attorney Stan Robison defended the purchases in a response letter he wrote to the auditors last year. In his response, Robison stated that redevelopment commissions are permitted by state law to purchase personal property needed for redevelopment. 

He added the firehouses are stationed so that they serve the two allocated areas that funded the purchases — the Charlestown Road and State Street TIF districts. 

“This is an eligible purchase and should not be questioned through this audit,” Robison stated. 

The city’s record keeping also was questioned in the audit. According to the report, there were discrepancies between reconciliation notes and transaction and balance records for two of the city’s 20 bank accounts. There was $57,820 more in unidentified cash shown in financial records than held in the two bank accounts, according to the audit. 

“Bank reconcilements presented for audit indicated that there is not proper management oversight or approval of the monthly bank reconcilements being performed,” the auditor stated in the report. “Additionally, monthly bank reconcilements are not being presented to the [city council] to allow them to properly monitor and assess the quality of the city’s system of internal control.” 

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