Auditor warns Parlier council of documentation gaps; councilors press for fixes as potential federal reimbursements and loan forgiveness are in question

Daryl Smith, a CPA working with the Ryan Jolly firm and temporarily for the city in the absence of a finance director, gave an in-person audit briefing on Nov. 2, telling the Parlier City Council the audit was completed but that the city faces material weaknesses and documentation issues that have delayed reimbursements and complicated federal grant oversight.

Smith said that Transportation Development Act (TDA) funds—Article 3 and Article 8—are currently held at Fresno County pending completion of an outstanding June 2021 audit; he estimated those funds could total up to $700,000. He also described a separate COVID-era business assistance loan the auditors flagged as ineligible for forgiveness because supporting documentation did not demonstrate program eligibility; as a result the award remains a loan on the city’s books unless the business owner can later provide the required documentation.

Council members asked whether the city could face liabilities if required documentation is not provided. One council member said the city faces a potential CalVIP payback of about $600,000; Smith said that some amounts are loans and that repayment, rescheduling or forgiveness depends on grant documents and whether a business owner provides supporting records. He recommended the city secure a permanent, qualified finance director and to produce accurate June 30, 2023 numbers quickly so staff can start the FY24 budget process.

Councilors and members of the public repeatedly pressed staff about internal control weaknesses and missing archives for invoices and ledgers; Smith and staff said management responses would be required, that some reimbursements (such as COPS and other program draws) are in process, and that staff are compiling documentation for outstanding reports. Councilors directed staff to provide written questions to the auditors in advance when possible and asked for regular (quarterly) updates to council and the public about the status of major grants and reimbursements.

No formal council vote occurred on audit items at the Nov. 2 meeting; councilors stressed the need for hiring qualified finance personnel and better recordkeeping to avoid future questioned costs and potential liability for the city.