Augusta audits findings: Two city departments, two firms, similar results

AUGUSTA, Ga. (WRDW/WAGT) - Two separate auditing firms, hired independently to review two different Augusta city departments, reached the same conclusion.

Years of weak oversight, inconsistent record-keeping, and outdated policies have left the city unable to fully account for how public money was spent.

The audits cover the Parks and Recreation Department and the Housing and Community Development Department.

In the case of Housing and Community Development, more than $6 million in federal rental assistance funding still cannot be fully explained.

Parks and Recreation

Auditors with UHY Consulting reviewed more than 20,000 transactions in the Parks and Recreation Department covering fiscal years 2021 through 2023. The city said there were no criminal findings, but auditors said the problems are serious and years in the making.

UHY identified outdated policies and weak oversight as the core issues, saying the department had been operating informally for years without a consistent documentation or accountability structure. The department’s policy manual was last updated in 2012.

Among the specific findings:

• At Lake Olmstead, $91,000 in charges were spread across seven different ledger codes, including a $5,000 speaker fee logged as “advertising.”
• Community centers had no master list of who used the buildings. UHY reconstructed that list themselves, identifying 43 user groups and more than $6.6 million in revenue over three years.
• On the Riverwalk, $1.4 million was spent, but the city has no specific ledger code for bulkhead repairs, making it impossible to track some of that work separately.
• Among 36,000 vendor payments, auditors found missing invoices, wrong dates and inconsistent documentation.
• Twenty-one parks had no ledger code at all. Thirty ledger codes existed with no park attached to them.
• Travel costs for some staff, including the former director, were found in unrelated expense categories. Auditors noted the former director stayed at more expensive hotels than other staff.
• Revenue from the city’s Candlelight Jazz Series did not match reported deposits — three years in a row.
• IT confirmed the former director’s email account was deleted, preventing auditors from reviewing that communication.

UHY recommended the city rewrite the 2012 policy manual, build a complete list of parks and facilities with proper accounting codes, replace cash travel advances with purchasing cards, develop a revenue classification policy, and create a centralized vendor contract list reviewed quarterly by deputy directors.

Auditors also flagged that a Public Information Assistant is currently handling financial responsibilities and said those duties should be reassigned to someone with financial expertise or that the employee should receive formal financial training.

City administrators said the next step is writing a formal response. Commissioners said they want that response before reviewing the audit line by line.

Housing and Community Development

Cherry Bekaert partner Bonnie Cox presented audit findings to the Augusta commission on March 10. Cox said the review focused specifically on how the Housing and Community Development Department received, used and reported Emergency Rental Assistance funds — federal money distributed to help residents pay rent during the pandemic. Cox described the presentation as an executive summary.

The audit examined financial records from fiscal years 2021 through 2025 and drew on related work Cherry Bekaert had already completed, including a grants risk management and gap analysis report issued in October 2024.

Cox said that earlier report identified weaknesses in how the department managed grants and laid out corrective actions that HCD leadership said they would take.

What the numbers show

Augusta received approximately $25.9 million in emergency rental assistance, according to Cherry Bekaert’s findings. Of that:

• $13.3 million can be fully accounted for, with most of those funds tied to payments administered through United Way
• $6.2 million was never used and was returned to the federal government
• Roughly $6.4 million in spending still cannot be fully explained or documented

Auditors were also asked to review a separate $1.3 million purchase of the Weed School property. They determined that money did not come from ERA funds but instead from another federal housing program managed through HUD’s IDIS system, and they were able to confirm those deposits.

Cox said auditors could see payments in bank records — including checks that appear to have gone to landlords and housing-related recipients — but could not confirm those transactions were properly charged to the rental assistance program because accounting records did not clearly connect them.

“The total cash in the bank accounts we did, we were able to reconcile those total cash of that bank account,” Cox said. “But the transaction level compliance cannot be demonstrated. That’s that full underlying support of the documentation that we were not able to be provided.”

In her presentation to commissioners, Cox identified nine findings:

1. No single reliable general ledger. Different versions of the general ledger were provided during the review, and those records did not consistently match bank activity, treasury drawdowns or federal reporting.
2. ERA funds commingled with other program funds. ERA funds were pooled in the same bank account as other housing program funds. Cox said that made it basically impossible in many cases to trace specific federal dollars to specific expenditures or confirm whether excess funds were used for the correct purposes.
3. No program-level cash reconciliation. Reconciliations were done at the overall account level rather than by individual grant program, meaning auditors could confirm total cash balances but not the exact balance for each federal program.
4. Inconsistent financial documentation. Different versions of the general ledger, coding structures, journal entries and check registers were provided. Because the records were not consistent, auditors could not always verify the full trail of transactions.
5. Weak grant coding and financial tracking. Transactions were not always coded in a way that clearly identified which federal program the spending belonged to, making it difficult to produce accurate reports showing how much was spent under each program.
6. Untimely drawdowns of federal funds. The report noted delays and inconsistencies in drawing down federal grant funds from federal systems.
7. Lack of timely reconciliations. Regular reconciliations between bank records, grant records and federal reporting systems were not consistently performed.
8. Weak journal entry controls. Auditors identified problems with how journal entries were recorded and reviewed, including a lack of clear controls and oversight. Cox said strong journal entry controls are important to ensure financial adjustments are legitimate and properly documented.
9. No formal process for federal grant reporting. The department did not have a standardized process for preparing the Schedule of Expenditures of Federal Awards and other federal reporting requirements throughout the year. Instead, Cox said, much of that work was done reactively, which created delays and inaccuracies.

Cox said the city needs to create one authoritative general ledger that ties directly to bank accounts and federal drawdowns, establish formal policies for grant revenue, drawdowns and reconciliations, separate program funds instead of pooling them, strengthen journal entry controls and provide additional staff training on federal grant compliance.

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Mayor’s response

Mayor Garnett Johnson said he was disappointed by the findings in both audits, saying they revealed similar problems with weak accounting controls across departments.

“I was disappointed in the findings — for both auditors to have a very, very similar result in that we have a lack of accounting controls, not only in Parks and Rec, but also in our Housing and Community Development,” Johnson said.

Johnson said the issues were more serious in Housing and Community Development because millions of dollars in federal rental assistance — meant to help families pay rent and keep utilities on during the pandemic — were not used for their intended purpose and the city cannot fully account for how some of that money was spent. He said he is calling for a deeper review to determine exactly where that money went.

Johnson said the return of $6.2 million to the federal government due to lack of use was what first drew attention to the program.

“Due to a lack of use for the $6.2 million is when it was brought to our attention,” Johnson said. “We had no knowledge that those dollars had actually been used for the purpose in which they were intended. And once, of course, that happened, is when it kind of opened our eyes and we had an opportunity to take a look at the program. We realized that the program had not been used to its full potential.”

Johnson said the city has already received a fine from the U.S. Department of Treasury and that federal authorities may be looking into other areas where federal dollars were misused.

“We’ve already received a fine from the US Department of Treasury. They’re already looking into potentially other areas to where federal dollars were misused in a very similar fashion,” Johnson said. “So I would wholeheartedly support having our federal law enforcement partners take a look at this.”

Johnson said he would support FBI involvement if necessary, given that the funds came from federal programs. Several commissioners also raised the possibility of requesting FBI involvement during the March 10 committee meeting. City attorney Plunkett said legal staff, auditors and the administrator would need to first review the findings together to determine whether there is sufficient evidence to refer the matter to federal authorities.

Johnson also acknowledged the city is currently out of compliance with its 2024 citywide audit, which he said means Augusta is not eligible for some state grant funding until that audit is completed.

City administrator’s response

City Administrator Tameka Allen said the issues are not limited to one department and did not happen overnight.

“We’ve had some significant gaps in our financial reporting,” Allen said. “Internal controls are not properly in place when it comes to our financials.”

Allen said Housing and Community Development and the Finance Department are now working together to reestablish internal controls.

“It’s very disheartening that we can’t even say what happened to the funds because some of those funds were not spent where they should have been spent,” Allen said. “I sat in that line with the community and the ones that needed those assistance and to find out that we don’t have the funding that was allocated to provide to them.”

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Allen also addressed the status of the city’s broader financial reporting. She said the 2024 citywide audit remains outstanding following the resignation or retirement of the interim finance director. The audit was due June 30, and Allen said the interim finance director had requested an extension before departing. She said that is why the city brought in CKH Consulting.

“In order for the citywide audit to be conducted, we’ll need that assistance to assist us in the 2025 [SEFA] so that we can get that audit done,” Allen said.

The city approved two outside consulting firms to assist with financial oversight. CKH Consulting Services will assist the Finance Department at $32,500 per month. BluLynx Solutions will assist Housing and Community Development at $8,750 per month. Allen said the goal is to complete that work within the next four months.

“What these companies will do will help us get that foundation, help us get the policies that are necessary to be in place,” Allen said. “Because we do deal with so many federal grants and we don’t wanna do anything that’s gonna jeopardize us losing money for our community.”

Allen said the city is focused on moving forward.

“We know a lot of things have happened in the past, but we are trying to look at the future and how we can move it forward,” Allen said.