The RHATT Pack Watch Day 84

The RHATT Pack Watch

Day 84

Today is Wednesday, July 18th, Day 84 of the Rhatt Pack Watch.

About three years ago, the Red-face Ratt orchestrated the hiring of his good buddy, “Cousin” Ken to conduct allegedly independent audits of the Town’s financial activities.  Let’s do a little sampling and see how “Cousin” Ken is doing.

Accounting and audits can be confusing so let’s simplify them.  First, White Springs has two types of financial activities, Governmental (generally tax related ) and Business (Services the Town Sells, like water, sewer and garbage collection).  Within these there can be two types of funds restricted and unrestricted.   Unrestricted funds can be used for any legal purpose.  Restricted funds can only be used for the restricted purpose of the fund.  It’s kinda like having two jobs; one restricted and one not.

Your earnings from the unrestricted job can be spent any way you want.  However, let’s say your restricted job earnings are for living acomodations only.  If you earn too little from this job, you can use the unrestricted job earnings to make up the difference.  But if you earn too much, you can’t use the excess for other purposes like transportation or vacations.  It’s not a slush fund.

Now consider audits.  Since the Great Depressions, audits have been done using what are referred to as “Generally Accepted Accounting Principles GAAP).  Today the Financial Accounting  Foundation (FAF) oversees the Financial Accounting Standards Board (FASB) for the private sector and the Governmental Accounting Standards Board (GASB)for the government public sector.  All fifty states, including Florida, considered “Mostly Compliant”use GAAP. For some reason, “Cousin” Ken weasel-worded around declaring his audits were GAAP Compliant.  The Rhatt Pack Watch wonders why.

GAAP sets out a very thorough set of standards concerning how to account and audit for every conceivable Financial activity.   Using GAAP, an audit is pretty straightforward.  An auditor ensures that revenue received goes ito the right funds and that expenditures come from the correct funds and that all the numbers add up.  Pretty simple.  An auditor isn’t required to check every transaction, but they are required to undertake certain sampling defined in GAAP.  

Now Cousin Ken has completed three audits for White Springs, which has a small budget of about 1.3 million per year.  We should all expect he’s familiar with the budget and has been sampling every year.

About two decades ago, facing bankruptcy, White Springs borrowed $100,000 from First Federal to maintain Town operations and to mainly pay back taxes to the IRS.  To repay First Federal, the then Town Council created an ordinance to tax utilities.  The two funds from this tax are restricted to the repayment of the First Federal Loan by this ordinance.  The loan was repaid many years ago.  The purpose of the tax and the tax which brings in about $61,000 per year continues.  The tax revenues are Restricted Funds, but all have evaporated from two Restricted Fund accounts without any public hearings  or Town Council actions.  Sampling by “Cousin” Ken should have detected this problem, but apparently, it has not.

Let’s try another restricted revenue from the Fuel Tax.  Every time someone purchases a gallon of fuel in Hamilton County 47.9 cents of tax (18.4 Federal , 23.5 State and 6.County) is paid on gas and 54.9 cents is paid on diesel.  Of these taxes, the State redistributes one cent of its tax to White Springs (6.55%) of the County fuel tax.  Over the last three years, this has amounted to over a half million dollars.  As you have learned previously, these are Restricted funds, exclusively for use on transportation infrastructure.  Again, all these funds have evaporated from the transportation Restricted Fund without public hearings or Town Council action.  Again, sampling by “Cousin” Ken should have detected this problem, but apparently, it has not. The Ratt and Lapdog run foot loose and fancy free with your money.

Let’s look at a different area. Labor is the Largest expense in the White Springs budget.  Over a three year period, if there were unsigned time sheets, they should have been detected by an auditor.  In fact that should be a clue that something isn’t right. One might expect if year after year vacation time, sick time or other benefit time, involving many tens of thousands of dollars, were exceeded by double or more that should be detected in any legitimate audit.  Again, sampling by “Cousin” Ken should have detected this problem but apparently it has not.  Is this what a clean audit is supposed to look like?

We know that “Cousin” Ken knew something was wrong, because he indicated the Town Council should reverse one of the Ratt’s and the Gang of Three’s illegal transactions defined in Resolution 18-2 but yet, there’s a clean audit.  What is happening in White Springs with your tax dollars is not legal.  And apparently there’s either a very poor audit or a Ratt cover=up.  Mr. State’s Attorney, this needs to be independently investigated.  The most independent organization is the FBI office in Jacksonville (904) 248-000.  There is just too much corruption to be understandable.

Don’t be taxed by the Ratt.  It’s Day 84 and Red-face Ratt hasn’t resigned yet.  The Rhatt Pack Watch continues!  

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