As East St. Louis scrambles to fill an immediate cash shortage and find ways to reduce a projected 2016 deficit of $5.9 million, an independent review of its finances shows that the city may not have collected all its revenue last year.
Overall, the St. Louis firm Brown Smith Wallace found that East St. Louis lacked the records and policies needed to insure it received all the money it was owed in 2014.
For instance, more than a third of the city’s registered restaurants and liquor stores didn’t pay sales tax for at least part of the year. Apparently the city’s records were outdated, so some of the listed businesses may have closed or changed names.
Including the problems collecting the city’s 1 percent packaged liquor and food and beverage tax, the review found six issues the firm classified as “high risk.” The other five are that:
- The city didn’t reconcile bank statements in a timely manner, inhibiting accurate accounting and control of cash flow.
- The treasurer’s office didn’t follow up with bounced checks.
- There was no record of a bond for the former treasurer, a legal requirement to safeguard taxpayers.
- Missing towing records.
- No checks and balances on parking meter revenue. Parking tickets are not tracked.
At a recent press conference enumerating East St. Louis’ financial crisis, City Manager Alvin Parks, Jr. said that he was making sure that all owed revenue is collected, but he wasn't sure how much that would be because his staff needed to "go over line item by line item to exactly know what are the projections versus what was collected.”
Parks also said that he was “following the cash management audit recommendations but in addition to that simply making sure that individuals are doing what they can do.”
“We have a regulatory affairs department that will certainly be seeking all the money that’s due it. We need to make sure that every parking ticket, every speeding ticket, every other kind of violation that is out there to collect upon we collect upon,” Parks added.
But Mayor Emeka Jackson-Hicks said that she was “still waiting on the city manager to bring forth information on how they plan on correcting the things that need to be corrected as far as the cash management audit is concerned.”
Jackson-Hicks said that in order to correct the problems highlighted by the independent review, the city needed to “address the management and make sure that policies and procedures are being followed.”
Asked whether she thought the city was doing what needed to be done, Jackson-Hicks said “not the way that it needs to. But hopefully we can get there.”
For more on East St. Louis’ budget crisis and what’s being done to reduce the deficit, see St. Louis Public Radio’s previous reporting.
Follow Camille Phillips on Twitter: @cmpcamille.
An earlier version of the story said the projected 2016 deficit was $5.8 million, not $5.9 million.