LAWTON — The city’s audit for Fiscal Year 2021-22 is eight months overdue, which could have an adverse effect on the City of Lawton’s ability to borrow money, as evidenced by a
warning received from Bank of America.
Finance Director Joe Don Dunham advised the City Council last week that the FY 2022 audit, originally due by December last year, is overdue because of “problems” created when the city changed software. Now, city personnel must revisit work previously performed and fix errors before the audit can be handed over to auditors, he said.
The council directed interim City Manager John Ratliff to “prioritize” completion of the audit, “utilizing outside resources if necessary,” and present the council with a status update “every 30 days or until completion.”
Dunham said it make take “a couple of years” to get back on track. However, at least one lender informed the city it is already long past due.
In letters dated July 27, Scott Nash, senior vice president of Bank of America, informed the Lawton Water Authority and the Lawton Industrial Development Authority that they were “in default” of a condition of their loan agreements as of March 27, 2023 – which could have an adverse effect on the city’s credit rating.
“Not more than 270 days after the close of each fiscal year” the Authority must produce “a report which includes financial statements prepared by the Authority and audited by [a] firm of independent certified public accountants…” FY 2022 ended on June 30, 2022.
“You are advised that the Bank requires strict performance by you of all obligations, agreements and covenants contained” in the agreement between Bank of America and the Authority “and will continue to enforce all terms and conditions thereof.” The letter “relates specifically to the default caused as a direct result of the Defaulting Circumstances,” Nash added.
Copies of the letter were sent to Mayor Stan Booker, to Ratliff and to Dunham.