Tuesday, July 31, 2018
The comprehensive annual finance report, or CAFR, was due on June 30, but the City of Jackson sent it to the State of Mississippi on July 22—22 days after it was due, financial consultant Michelle Thomas said at a press conference on July 30.
The delay came from errors in CAFRs dating back to 2001. The auditor's office had to go through and make the necessary changes to ensure the most recent audit, from Oct. 1, 2016, to Sept. 30, 2017, has accurate numbers.
"We believe in an open, honest process, and we believe in getting it correct," Mayor Chokwe A. Lumumba said at the conference. "That is our commitment—that we're going to make certain that we check the numbers; that we no longer have $7 million errors in our CAFR; that we know the figures. We check all of our numbers and make sure we serve the people to the best of our abilities."
None of the errors affected federal funding, Thomas said. "The findings in general were not startling or damaging," she said. "Most of them were process-related, and we are in the process of making those improvements."
The City has fixed $7-million errors, which will not have a lasting impact on the City, Thomas said. "It wasn't cash," she said. "We neither lost $7 million or found $7 million. We had $7 million in error in our reporting, so that has been corrected."
The issue, in part, stemmed from the use of the same auditing firm for a decade, Lumumba said, bringing no fresh eyes to each audit. Most cities switch firms often to avoid issues like the ones the City of Jackson ran into, he said.
Officials have put plans and processes in place to avoid future issues, he said.
The completion of the CAFR meant the Mississippi Department of Transportation lifted its short-term ban of funding projects in the City. The ban lasted about two weeks, but no projects stopped construction, the mayor said.
Jackson City Council must vote to accept the CAFR, even though it was already sent to the State. The auditor's office will give the council a rundown of the CAFR at the finance meeting on Aug. 7 at 2 p.m.