On the Agenda: Spearman City Auditor Calls it Quits

At Tuesday’s regular city council meeting city manager Justin Parker surprisingly announced to the Spearman city council that the city’s auditor would not be completing the audit.  

 Under Texas law, general law cities such as Spearman, are required to conduct an annual audit and make the audit available to the public for review no more than 180 days following the end of the city’s fiscal year.  The city is currently in violation of state law, as its fiscal year ended on September 1, 2023, and the 180 period would have closed in March of 2024. Historically, the city council has been presented with an audit during the month of February.

We have requested information from the city manager to answer the question we all have, which is “why” wasn’t the city audit completed, but we have yet to receive an answer.  We have asked several council members and others who attended the city meeting “why” and we were presented with a confusing answer that made the claim that the freshly retired city secretary wasn’t entering something correctly into the “new software” and that was part of the reason.  

 (Editor’s note:  I can attest from personal experience working closely with the retired city secretary that she kept excellent books and records for the city for more than 35 years and in all that time, the city presented complete, clean audits.)

 The city’s “new” accounting software, is not “new”.  The city purchased and implemented the new program into their accounting system in 2016 and there have been completed, clean audits presented to the city council using that software since that time.  

 This is the third year that the city has engaged to be audited by the auditing firm, Dozier, Pickens, and Francis.  In prior years, Brown & Graham had conducted the city audit, but they discontinued doing government audits several years ago, prompting the city to search for a new auditor. 

 One of the challenges in our region is finding accounting firms who have the expertise to conduct government audits, and Dozier, Pickens, Francis is one of the only firms that engage in these types of audits in our area. In fact, our research shows Dozier presented the only bid to provide auditing services to the city.

 Dozier also conducts the audit for Hansford County and many other local governments, as they are a reputable organization that works all across the region.  The city signs an engagement letter to work with Dozier, their fee is around $27,000 which is billed upon delivery of the audit to the city.  

 The engagement letter would define the expectations between the two parties.  It would be under these outlined expectations that the auditing firm would have reason to exit the contract. 

While this is an unprecedented event for the city, there was very little discussion about the situation.  Our sources said that Council member Don Schroeder, an accountant, expressed serious concern, but other council members were largely silent on the issue. 

 The item was presented as part of the city manager’s report and notice of this discussion was not given to the public, however no action was taken.  

 Given that the city is already in violation of state law on the very late timing of the audit, coupled with the decision by Dozier to drop the city when they are possibly the only option available to the city in our region, presents the City of Spearman with a concerning situation. 

 We have requested information from the city to complete this story and we will update this story as it develops.