At Century's council meeting on Monday, May 20, Councilwoman Ann Brooks read portions of letters and emails she received from Warren Averitt, the company that is doing the town audit, as well as penalties and fees assessed for the town on late payroll taxes in the past and the recent months of January, February, March and April of 2019.
Brooks said she learned that Toni Simmons is responsible for providing the information from the billing program to Kristina Wood, who is responsible for preparing the returns and that she repeatedly requested the information necessary to file the sales tax and gross receipts tax returns and informed Kim, the mayor and Robert that the requested information had not been provided.
“The penalty is 10 percent for each month the tax is late, not to exceed 50 percent of the tax,” she read.
Among other notices Brooks received, there were several from the Florida Department of Revenue dated Oct. 3, 2018, Nov. 5, 2018, Feb. 4 of 2019 and Feb. 18, 2019 assessing late fees and interest for failure to timely file and pay August, September, November and December 2018 returns.
Brooks said there was also an assessment from the Internal Revenue Service (IRS), dated April 29, 2019, assessing $2,346.61 for failure to file and pay the fourth quarter 2018 payroll taxes timely.
The town is required to remit payroll taxes related to each week's payroll by the following Wednesday.
The balance was $14,060.26, and the tax not received by the IRS until Feb. 28, 2019. Brooks said the late filing penalty alone was $639.08.
On the first quarter 2019 Form 941, there was balance shown on the return of $30,470.40, according to Brooks.
“There would be a zero balance on the Form 941 if we paid our taxes when they were required to be paid,” said Brooks. “We will receive a notice from the IRS assessing large penalties and interest for failure to timely pay our first quarter 2019 payroll taxes. Neither payroll tax payments due on April 24 and May 1 were made.”
Brooks said she has also been inquiring about the town's audit and referred to several letters and emails she had received from the audit company. The company said it had been waiting for responses and information from town employees, according to the correspondences.
One correspondence read, 'Based on the grand jury report, we will need to modify the scope of the audit.' The minimum fee was increased from $21,000 to $30,000, based on the larger amount of work that would be required to complete the audit.
“This information has been here for some time and we have not been aware of it,” said Brooks. “They have waiting on a response to this to proceed with the audit.”
“And because of no action, the town of Century endures more cost,” said Councilman Ben Boutwell.
“Yes, it's not just that, it's all the problems that we've had with the grand jury findings,” said Brooks.
Mayor Hawkins told the council he had not seen that email.
Brooks called for a motion to authorize the auditor to proceed with the audit at a minimum fee of $30,000.
Councilman Luis Gomez asked if there was money in the budget. CPA Robert Hudson said they had $21,000.
Councilman Boutwell made the motion, which was seconded by Councilman James Smith, but there was no vote. Gomez suggested the council wait until the town found the other $9,000 prior to agreeing to spend it.
Hudson said they had budgeted $75,000 for the Capital Trust Agency (CTA) for 12 months and that the town had already gotten $151,102. Mayor Hawkins reminded them that they had recently gotten $17,000 from the CTA also.
Councilman Smith wanted to know how this situation came about and who was at fault.
Councilwoman Brooks clarified that she was told it would be after tax season and discussion turned to why the cost went up, citing the town's problems and larger scope of work that will be involved in completing the audit.
All council members voted yes and Councilwoman Brooks assured the extra $9,000 will come from the CTA. Councilwoman Brooks reminded Hudson that when he becomes aware there is a problem with the town's finances, he is to bring it to the attention of the council. She asked that he come up with a check list of what and when all types of taxes are done, due and paid, it would benefit the council.
Hudson said he wasn't sure why the ball has been dropped in the past, but suggested on a weekly basis, everything that should be done be checked off and he would explain to town employees how important it was to keep it up-to-date.
