DKM Certified Accountants Travis Green, right, and Ray Stevenson explain their position to board members of the Palm Harbor Community Services Agency March 19. Seated is board member Terry Haas.
PALM HARBOR – Palm Harbor Community Services Agency board members were unhappy with the results – or rather the lack of feedback – from an annual audit reported to the board March 19.
The agency, commonly referred to as PHCSA, switched to a new auditing company this year, after its longtime auditor retired. In the report delivered to the board members Jan. 14, representatives from DKM certified public accountants stated that financial statements of the agency “present fairly” the financial position of the agency.
The problem was, when board members questioned the details of the report, the accountants did report problems they saw with the financial report. The agency should go to accrual-based accounting, rather than cash basis and the three entities the board oversaw should keep an asset schedule to track the depreciated value of their assets over time, to determine when items should be replaced and if necessary replacements can be categorized as a gain or loss.
Why then, the board members asked, were those problems not included in the report?
Audit partner Travis Green said the point of the report was to identify things the agency could change by the time of the next audit so progress could be tracked.
“We know that’s not going to get fixed in 12 months,” Green said.
“It answers the question, but it makes me nervous,” board member Terry Haas commented. “You said there are no findings; now you’re saying there are findings.”
Board member Tom McKone asked if the company was going to train PHCSA employees on what needed to be done to fix the problems.
“I guess we just need to know what’s wrong so we can fix it and we don’t know that right now,” PHCSA chairman Rex Haslam said.
Auditor representatives agreed to write a “communication letter” to delineate the issues, some of which were already worked out with the directors of the three entities the agency oversees.
“I’ve never in my life been blind-sided like this with an auditor before,” McKone said after they had left.
Hass agreed, “I’m at a loss. I don’t get it.”
The auditing company did provide the agency with a three-page letter listing the “significant audit findings” on March 20. Haas said that letter “looks to be a lot more of what I expect.” In his experience with other governmental agencies and nonprofits, even very well run organizations will have some financial reporting issues that could be improved, he explained.
“My view of audit reports is that they are really a learning experience; they are very valuable things,” he said.
Human resources considered
The PHSCA board also heralded the departure of its human resources generalist Mary Mason, who accepted a new position more in line with the job she had “before I had kids,” she explained.
With her departure, the board considered whether to replace her position with a new hire or instead utilize a new service provided by ADP, a company the agency currently uses for payroll services. The new service would provide remote human resources expertise, as the agency needed it for a lesser cost than a full-time staff person.
The agency already is interviewing to fill a recently vacated part-time position to handle at least part of Mason’s role. The board heard a presentation by ADP representatives early in the meeting, but did not come to a consensus as to whether it should use the service, Haslam said.
“We will be discussing that at our next meeting,” he explained.
The board’s meeting on Wednesday, April 16, 7 p.m., at the East Lake Community Library, 4125 East Lake Road, is open to the public.