County agrees to settle up with city on 2008 sales tax
Under pressure from the Cairo City Council, the Grady County Board of Commissioners voted unanimously Tuesday morning to go ahead and pay the city $212,574 from the 2008 Special Purpose Local Option Sales Tax that the county has been holding and improperly accounting for.
The city council voted April 24 to demand payment of the proceeds of the 2008 sales tax that had not been disbursed to the city in accordance with an intergovernmental agreement between the county and the city. This action was taken after the results of a special audit of the 2008 SPLOST was completed by auditor Tom Carmichael of Carr Riggs & Ingram, who is the auditor for both the city and the county.
Carmichael was engaged to conduct the special audit for the city last year after Cairo businessman John Brannon approached city officials with the findings of his own research of county records, which revealed that the county was holding funds on deposit that the city was entitled to.
Cairo City Councilman James H. (Jimmy) Douglas, who chairs the council’s finance committee and has been a vocal proponent of pushing the county to remit to the city its share of the tax collections, attended the county commission meeting Tuesday morning.
“If John Brannon had not got involved in this we still would not know the county owed the city the $212,574,” Councilman Douglas told the board of commissioners.
Grady County Commission Vice Chairman Ray Prince questioned why the auditor, who serves both governments, had not picked up on the issue through the annual audits of the city and county government.
Douglas said he did not know if Carmichael had discovered it or not, but he said that Grady County Administrator Carlos Tobar knew there was money in the county’s bank account in excess of the $900,000 earmarked for the aquatic center, which the city agreed to jointly fund, and that 39 percent of that money was owed to the city.
Commissioner T.D. David said the attention required was not paid to the collection and disbursement of the 2008 SPLOST. “That’s not the city’s fault,” Douglas responded.
The city is also seeking its share of SPLOST that was paid out by the county to special projects in excess of the budgeted amounts included in the intergovernmental agreement. The 2008 SPLOST was projected to generate $14 million but actually generated $15,419,471.
Carmichael’s audit revealed that the county continued to pay the Grady General Hospital Authority, Roddenbery Memorial Library, the City of Whigham and the Grady County Historical Society money over and above what city leaders said was agreed to in the 2008 SPLOST agreement.
County officials say they were not aware of the overpayment until the findings of Carmichael’s special audit were released. In the annual report on SPLOST collections and expenditures published at the end of each year the county commission has reported paying the various special projects even more than what the county’s auditor found.
No one offered a clear explanation for the discrepancy Tuesday.
“I don’t understand why we still don’t have the numbers,” Grady County Attorney Kevin S. Cauley said Tuesday and he suggested that Tobar and Cairo City Manager Chris Addleton meet and determine what can be worked out to resolve the issue over the additional $44,670.60 or 39 percent of the tax remitted to the various projects over and above what was called for in the SPLOST agreement.
Cauley suggested it might also be an opportune time to audit the current SPLOST and grants the county has been awarded to make sure all funds are being accounted for properly.
Commissioner LaFaye Copeland suggested the county retain the services of a new auditor and said that in some of the continuing education classes she has taken it has been recommended to routinely switch auditors.
Cauley noted that regardless of who the county engages for auditing services it is the board’s responsibility to make it right with the city.
Carmichael had suggested the county could not give the city a complete accounting of the 2008 SPLOST until the aquatic center is completed.
“You didn’t want to build the aquatic center to start with so I don’t anticipate you spending more than $900,000 on it,” Councilman Douglas said.
According to Cauley, the 2008 SPLOST agreement between the county and city addresses if projects come in below budget, but it is silent with regards to projects that go over budget.
However, county officials cannot say if the various projects funded by the tax went over budget or not.
“The county has no idea what the projects cost,” Douglas said. Vice Chairman Prince said that was what the county was now trying to do.
Commissioner David said the county needed to ask the various special interests what their project costs ended up being. Councilman Douglas said all of them were overpaid and David admitted that was an error. Cauley said if it was an error it was the board’s responsibility to correct it.
The county attorney suggested the board consider taking action on the city’s request for the payment of the $212,574, which no one argues is owed to the city and a decision on the overpayment to the various special interests could be considered later.
Councilman Douglas concurred, but he also questioned why Tobar had not shared the findings of Carmichael’s special audit earlier. Douglas said a draft had been provided to him on March 30 and he said he assumed Tobar had been provided a copy shortly thereafter.
Tobar admitted he had been provided information from the auditor on April 5, but he said he had not been provided the spreadsheet produced by the auditor until last week.
On more than one occasion Tuesday, Tobar commented that he had discussed with each commissioner “privately” what had happened over the years regarding the accounting for the SPLOST.
The county administrator said he would not point fingers or blame others for past mistakes.
Tobar said that when he discovered accounting issues in 2014 he “called a time out on payments to the city until I could figure it out.” Based on county records, Tobar did not cease payments to the various special interests in 2014.
Prince blamed the auditor for the issue not being addressed years ago. “He should have caught it way back then rather than it just now showing up,” Prince said.
Both Prince and David pressed Tobar for an answer from him if the numbers would differ from those presented by the auditor. Tobar said he would have to revise the numbers in the SPLOST annual report, but that the numbers would not differ from the auditor’s findings.
“If the numbers will not change from Carmichael’s then let’s write the city a check. There is no need to beat a dead horse,” Vice Chairman Prince said.
The board voted unanimously to issue a check for $212,574 to the city.
With regard to the issue regarding overpayment to the special interests, Tobar contends that if the project costs of the projects of the hospital authority, City of Whigham, Roddenbery Memorial Library, and Grady County Historical Society went over budget then each project was entitled to additional money.
However, the county has no evidence any of the projects went over budget or what the actual project costs were.
Councilman Douglas and city leaders contend the city should have been consulted prior to money over and above the budgeted appropriations in the 2008 SPLOST agreement being paid.
The board instructed Tobar to meet with the city manager and auditor to resolve the remaining issues.
“Whatever mistakes have been made we will correct and get straight moving forward,” Vice Chairman Prince said.