How the City of Holbrook handles purchases and signs checks were the topics of a recent interview with Interim City Manager Randy Sullivan. Questions were raised over the procedures and handling of these issues at the Jan. 24 city council meeting.
According to Sullivan, the policy for signing the numerous checks that are a part of conducting business at the city was put into place long before he came to work there eight years ago. In his dual roll as interim city manager and finance director, Sullivan says he’s always been very careful to maintain a separation of duties. “I’ve never made a claim, signed a check or filed one,” he said. His duties allow him to generate a wire transfer, but he can’t sign off on the transfer.
In addressing a concern expressed by Councilman CJ Wischmann regarding the signing of checks, Sullivan explained that the city currently has three check signers, Mayor Bobby Tyler, Vice Mayor Wade Carlisle and City Clerk Cher Reyes. The recent addition of Reyes was recommended after he had difficulty locating a signer for the bi-annual interest payment for the wastewater treatment plant in December. “Twice a year we deal with this. In August it’s a principle and interest payment, and in December it’s an interest only payment. I’d texted both Wade and Bobby the prior week asking for one of them to come in and sign the check, but didn’t hear back. When the bank called a couple of times to ask when someone would come in, I finally called Bobby and he was on his way up from the Valley and was able to stop in and sign it. I wanted Cher added in case that became a problem again,” he said.
When it comes to signing all the checks required of the city, the process included creation of a stamp of the signer’s signature and the city clerk used that stamp on each check on the consent agenda approved by the city council. That task was recently turned over to Director of Administration Pat Nichols.
The process isn’t ideal and has always produced a finding by the independent auditor that reviews the city’s finances. “It’s somewhat unique to Holbrook to use this process, but other entities have processes that could be done differently also. We can’t tell them how to fix the process, we just let them know that this is something that should be changed,” explained Scott Graff of Colby & Powell, PLC, the firm that conducts the annual audit, adding that this has been a repeat finding for Holbrook for many years.
Sullivan said that he’s not opposed to have either Tyler or Carlisle come in to sign checks each Wednesday, but it is something that could be quite time consuming. “We sometimes have hundreds of checks that need to be signed and then reconciled. It could take half the day to go through them all,” said the interim manager.
He reiterated that none of the checks are paid until they have been approved by the council through the consent agenda. “The council should be reading each of those entries prior to approval and if they disagree with one, it can be removed,” noted Sullivan.
He emphasized that no one, including himself, is forging any signatures. “I don’t have anything to do with signing checks,” he said.
The process should not be unfamiliar to Mayor Tyler, as his signature stamp is the one used for the checks and was authorized by him.
In explaining the city’s purchase order policy, Sullivan said that any purchase over $100 from any of the departments must be approved by the city manager. A purchase of up to $2,500 can be made without obtaining multiple quotes. For purchases of $2,500 to $5,000, at least three verbal quotes must be obtained, with the lowest qualified quote being selected. Anything over $5,000 requires at least three written quotes. “If there’s a purchase for like a few dollars from Walt’s Hardware, then we require a receipt. I don’t pay that bill until every purchase is reconciled. Once in awhile a receipt can get lost, but we find the person that made the purchase and verify it if necessary,” explained Sullivan.
When asked if there was any fraud occurring at the city offices, Sullivan replied, “Absolutely not. If that was happening the auditors would find that and include it in the report that the council receives each year.” The audit provided to the council last year by Colby & Powell has the repeat finding regarding the method of check signing listed at the top.
When asked if the mayor and each member of the council have received training regarding what their roles are and obligations are in their position, Sullivan said that as far as he understood, each of them had. “To the best of my knowledge they’ve attended every training they’re supposed to,” he said.
Councilman Richard Peterson recommended at the last meeting that the council may benefit from a meeting with city administrators in order to gain a better understanding of the processes, an idea that Sullivan favors. He’s also available for council members who have any questions regarding policy. “I’m happy to discuss any questions that the mayor or the council members have, or the citizens for that matter. My door is always open,” he concluded.
