City of DeKalb had ‘Excess Expenditures’ of $3.1 Million in FY2013

**Update, noonish: Just picked this up on Twitter: IL Rep. Tom Demmer (R-Dixon) is sponsoring legislation to help prevent thefts of local government funds. One of the key provisions includes auditors’ sharing copies of the management letters with the governing bodies of counties and municipalities.**

Recently I became aware that each annual financial audit includes an auditor’s “letter to management” with comments and recommendations. As far as I know, such letters are not published (perhaps due to inclusion of deficiencies that some would find embarrassing) but a citizen can obtain them via Freedom of Information Act requests and I did.

This piece of the FY2013 letter caught my attention:

 photo AuditorsLettersOverBudget_zps70d364e4.jpg

“Excess of actual expenditures over budget” to the tune of $3.1 million is pretty major, especially for a town that supposedly is striving to meet a target to hold the equivalent of 25% of its General Fund balance in reserve.

Why isn’t the overspending big news? When it comes to the General Fund, the city enjoyed revenues that exceeded projections for the year — enough to cover the excess spending and a bit more. I guess the philosophy is, if you don’t end up with an actual deficit in your GF, it doesn’t matter what you spend.

Other funds, such as Equipment and Fleet, aren’t so easy to explain. For example, Equipment had excess expenditures of $512,680 according to the letter, yet total expenditures as shown in FY2013 estimates (which are part of the FY2014 budget) are only $259,310. Fleet has a similar story. Did someone OK last-minute spending sprees that didn’t make it into the FY2013 budget estimates? What should we make of this?

6 thoughts on “City of DeKalb had ‘Excess Expenditures’ of $3.1 Million in FY2013”

  1. What would be truly imteresting Lynn is to see how many new vehicles and pieces of equipment the City of DeKalb purchased and put into service this past year. I would also like to see which council meeting these were all approved.

  2. Hi Ivan! Here’s the scoop from meeting agendas.

    — Aug 2012: PD gets approval to buy 2 vehicles. Tab appears to be about $30,000 each.

    — Feb 2013: Approval for truck just under $60,000; this is apparently for PW.

    — June 2013: $124,800 for an ambulance and just under $30,000 for a Ford Explorer were approved for the fire department with competitive bidding waived.

    — July 2013: PD obtains approval to replace 4 squad cars for $151,765.

    — Aug 2013: PW obtains approval to purchase 2 Ford Explorers and a pickup truck, total about $81,000.

    — Sep 2013: FD gets approval to buy a Ford Explorer for $30,000.

    I’ve mostly focused on calendar year 2013 so might have missed a stray purchase or two. Still, this accounts for $537,500.

    The interesting part of this is the off-budget stuff, which I wasn’t even aware of until quite recently.

    For example, the August 2012 PD vehicles were approved to be paid for with budget funds AND drug forfeiture funds. I can only find one invoiced in 2012 and it was to the Fleet Fund later that month. There is also another vehicle showing up in payment records but not until early June 2013 and that wasn’t paid with drug forfeiture funds but administrative tow funds. So was there a change in approval of funds or was there a third vehicle approved that I haven’t found yet? This seems very messy and not clear at all.

    One thing I do know is that I requested three years’ worth of the management letters; since the file is only 16 pages long and the first page of each letter is boilerplate, I’m assuming only issues of serious concern are included. These capital funds — which, by the way, the auditors also believe should be consolidated — absolutely need a close look.

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