Lawton’s Fiscal Year 2023 audit was filed last week with the State Auditor and Inspector’s Office – albeit a year late – “and now we can move on to ’24,” Finance Director Rebecca Johnson informed the City Council.
Mayor Stan Booker asked when the council can expect the FY 2024 audit to be finished. Johnson replied, “It looks like March [2025] will be our target for completion of that one.” She also said her next goal is to have the audit of the city’s finances for FY25 completed by year’s end 2025.
Lawton’s FY22 audit was submitted to the State Auditor and Inspector (SA&I) in June 2024, a year and a half late. The City of Lawton changed banks and switched to a different accounting software system in 2022, which caused numerous problems in completing the audits for Fiscal Years 2022 and 2023.
State law provides that a municipality’s audit of its fiscal year finances should be completed within 180 days from the end of that calendar year: i.e., Dec. 31 of that particular year.
Chickasha, too, is behind on its FY ’22 and ’23 audits. Their troubles began when their auditor retired unexpectedly, former Mayor Chris Mosley said.
Chickasha’s FY22 audit should be ready for submission to the SA&I by “the end of this year or the first of next year,” Finance Director Elaine Jensen told Southwest Ledger on Dec. 2. The difficulty of completing the audit can be attributed at least in part to the fact that the City of Chickasha has 37 funds “and accounts in each one of them,” Jensen said.
Tardy audits of a municipality’s financial ledgers have financial repercussions.
For example, motor fuel tax allocations for Lawton and Chickasha 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.”
In mid-July the City of Lawton received $161,670.55 in gasoline taxes that had been withheld until the FY22 audit was completed and submitted to the SA&I, Deputy Finance Director Kristin Huntley told the Ledger.
Incomplete audits affect Lawton’s ability to borrow money, former Finance Director Joe Don Dunham said earlier this year. “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.
At that time the City of Lawton was in violation of the state Administrative Code provision on “closure/post-closure cost estimates.” The “financial assurance mechanism” is proof that the city has sufficient resources to safely and adequately shut down the landfill if it needed to.
The council authorized city officials to enter into a consent order with the DEQ. The decree required the City of Lawton to submit to DEQ an alternative financial assurance mechanism in the amount of $9.1 million.
In addition, Bank of America notified Lawton city officials via a letter April 30 that as of March 26 the Lawton Water Authority was 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.