OCEAN CITY — One of the loose ends resort officials had to tie up during the budget wrap session last week was whether to create an internal auditor position for the town.
During budget work sessions, the idea was pitched to create an internal auditor to oversee the books of each of the town’s many departments. There is already a city manager, a budget manager and a finance director who keep eyes on the finances of each department, but the idea was pitched to create an internal auditor position to carefully pore over each department’s books on a regular basis. After some debate, the council signed off on the creation of the new position. Budget Manager Jennie Knapp said the position was crucial.
“It’s a very important position for the town,” she said. “We feel there are risks if we don’t do this. It’s already budgeted.”
Council Secretary Tony DeLuca questioned if the auditor position could be farmed out to an outside agency at a lower cost.
“I don’t think we need a part-time position,” he said. “I think if we contracted it out, it would be $35,000 and not $100,000.”
Knapp provided examples of how the town can and does lose money because of the lack of careful auditing on a regular basis.
“I think we would lose money because things aren’t getting done,” she said. “We have $3 million in P-card purchases annually. It is very easy to use your P-card fraudulently.”
Knapp also pointed to some things falling through the cracks because of a lack of regular audits.
“Look at the admissions and amusement tax, for example,” she said. “The beach stand operators are supposed to submit the tax each year. They are paying it, but they’re not checking the box for Ocean City and it is getting sent to Worcester County. That’s just another example.”
Mayor Rick Meehan said an internal auditor could assist the city manager in keeping watch on the finances of all of the many departments.
“I think the city manager is responsible for all of these things Jennie has mentioned,” he said. “He needs this position. It would be advantageous to him and the city. He needs the tools to keep an eye on these things.”
Finance Director Chuck Bireley agreed.
“I agree with the mayor,” he said. “Everything he said is true. Could an outside firm do this? Absolutely. I believe this needs to be an internal position.”
Bireley said while nothing nefarious was going on, each department should be audited on a regular basis.
“An internal auditor should audit every department in town on a rotating basis,” he said. “Larger departments should be audited more often. Those that generate revenue should be a priority. If you contracted with an outside auditor, the cost to audit every single department would be astronomical.”
