Lawton’s Fiscal Year 2022 audit has been filed with the State Auditor and Inspector’s Office – a year and a half late – newly appointed Finance Director Rebecca Johnson informed the Lawton City Council on June 25.
When asked about the FY 2023 audit, Johnson replied, “We plan to turn it over to our auditors” from FORVIS “in August.” After their review, the FY23 audit is expected to be delivered to the State Auditor in October, she predicted.
And then, of course, the audit for FY 2024 will have to be addressed.
State law provides that a municipality’s audit of its fiscal year finances should be completed by the end of that calendar year: i.e., the statutory deadline for completion of FY 2022 audits was Dec. 31, 2022 – a year and a half ago – and the deadline for submission of FY 2023 audits was Dec. 31, 2023 – six months ago.
Chickasha has been in the same situation as Lawton.
Southwest Ledger asked a spokesperson in the State Auditor’s Office at 11:35 a.m. June 28 whether Chickasha has submitted audits of its financial records for Fiscal Years 2022 and 2023. “No,” she replied. “FY 2021 is the most recent audit we have.”
“I have confirmation that these are not yet available but they are being actively worked,” Shae Mortimer, the City of Chickasha’s civic engagement manager, told the Ledger recently. “We hope to have the ’22 audit done within the next six weeks,” Chickasha City Manager Keith Johnson told the City Council on June 17.
Here is the link for Lawton’s FY22 audit, which has been uploaded to the State Auditor’s website: https://www.sai.ok.gov/ olps/uploads/city_of_lawton_ filing_1_trans_ltr_fs_rpt_ sar_2022_o272.pdf.
Tardy audits of Lawton’s financial ledgers for FY 2022 and 2023 have had financial repercussions and triggered warning notices from a bank and from state environmental monitors.
For example, motor fuels tax allocations for Lawton have been withheld pending submission of their audits.
State law decrees, “If a municipality does not file a copy of its audit” as provided in Title 11 of the Oklahoma Statutes, the State Auditor and Inspector “shall notify the Oklahoma Tax Commission which shall withhold from the municipality its monthly allocations of gasoline taxes until notified by the Office of the State Auditor and Inspector that the audit report has been filed.”
“We don’t know the exact amount that is being withheld; that is calculated by the Oklahoma Tax Commission via a formula,” former Lawton Finance Director Joe Don Dunham told the Ledger. The City of Lawton typically receives “between $10,000 and $13,500 per month,” he said. Thus, the Tax Commission could be withholding perhaps $240,000 to $324,000 in motor fuel taxes that Lawton could use to fix more of its streets.
The incomplete audits also have affected Lawton’s ability to borrow money, Dunham told the Ledger. “Our credit rating is not bad,” but the incomplete audits “affect our ability to borrow money, because banks want to see our financials,” he said.
In addition, the Oklahoma Department of Environmental Quality issued a Notice of Violation on Feb. 14 against Lawton’s solid-waste permit to operate its sanitary landfill, for failure to provide “an approvable financial assurance update” for Fiscal Years 2022 and 2023.
Failure to submit a “compliance plan” could result in “escalated enforcement, including penalties,” wrote Kelly Dixon, division director, Land Protection Division.
The City Council discussed the NOV during a closed-door executive session June 25 but took no action afterward, Mayor Stan Booker said.
Bank of America notified Lawton city officials via letter April 30 that as of March 26 the Lawton Water Authority had been in “technical default” on its Series 2013 Supplemental Note Indenture. The Authority is required to submit an audited financial report no more than 270 days after the close of each fiscal year.
Scott Nash, senior vice president of Bank of America, informed the Lawton Water Authority and the Lawton Industrial Development Authority in a letter last July that they were “in default” on a condition of their loans as of March 27, 2023. Councilman Randy Warren described it as a “do better letter.”