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Auditor gives Sullivan City finances clean bill of health

Though an auditor has recommended Sullivan City hire at least a part time accountant to improve the city’s financial record keeping, the city’s finances have been given a clean bill of health.


“So this is saying that it’s a clean audit report, which is better than last year,” said Suzanne Muñoz, an accountant with Oscar R. Gonzalez and Associates during her presentation of the firm’s audit to the city’s mayor and commission June 27. The audit, for the fiscal year ending Sept. 30, 2016, shows the city’s assets from governmental activities exceeded its liabilities at the close of the most recent year by more than $1.6 million, compared to $1.17 million in the previous year. The city’s general fund ended the year with a positive fund balance of just more than $546,000, Muñoz reported.

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Muñoz said the only shortcomings found was the failure of the city’s bookkeeper, Veronica Gutierrez, who is also city secretary, to properly close out the annual financial report. Muñoz said the city also needed to implement a better system of keeping track of accounts payable.


“I don’t blame Veronica. Governmental accounting is very, very difficult,” Muñoz said. “She improved tremendously from the prior year but it still needs more work.”
Muñoz suggested the council either provide Gutierrez additional training or hire a consultant either every quarter or once a year to assist in closing out the financial report and keeping better track of accounts payable.


“Like I said, it’s a clean audit but I do recommend you look into that,” Muñoz said.


City Manager Juan Cedillo said the city is already looking into reconciling the accounts payable issue by creating a separate bank account for the city’s long-term debt. He asked Muñoz to provide referrals for a financial consultant.


“In my opinion the city’s in great financial shape,” Cedillo said. “It’s one of the few cities I’ve been a part of which can say that.”


Muñoz agreed, pointing out the city’s projected revenue for 2016 was $1.37 million but actually collected $1.64 million. She cited increased revenues in fines, permits and fees as a contributing factor in the revenue increase despite a $9,000 decrease in sales taxes.


Cedillo said Wednesday the positive audit would benefit the city’s plans for growth in the coming year.


“With this audit we can borrow money and get a good interest rate,” Cedillo said. “And we’re planning to purchase some new police vehicles so this audit will help.”  


On another positive note Cedillo said he was informed June 30 the Office of the Secretary of State had reinstated the city’s Economic Development Corporation to active status. Cedillo said the announcement follows the city providing the state comptroller’s office with Texas Franchise Tax, No Tax Information Reports dating back to 2009.


According to the comptroller’s website, the Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in, and doing business in the state, including economic development corporations. Under state law EDC’s have a threshold amount that can be collected in taxes after which a tax must be paid to the state.


Cedillo was hired by Sullivan City in December and soon after began researching the records to provide the comptroller.


“There was a lot of research and with Veronica’s help we got it done,” Cedillo said, referring to the city secretary.

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