Howe's auditors found that money the city receives from Grayson County for fire protection is moved into the volunteer fire department's own bank account, where the city has no controls to review how it is spent. That is one of three findings, and 10 broader recommendations, in the 2024-25 audit going to the City Council on Tuesday, Oct. 20.
The report from Vail & Park, P.C. of Tom Bean covers the fiscal year that ended Sept. 30, 2025. City Administrator Monte Walker wrote in a memo that it is the third audit presented to the council in 11 months as the city works to catch up.
The three formal findings
- Financial reporting (material weakness, recurring). The auditors wrote that the city lacks key written financial procedures and controls to catch and fix errors in time. They made material adjustments to many balances, including cash, accounts payable, court costs, customer deposits, payroll, capital assets and long-term debt.
- Fire service money (material weakness). Once county fire funds are moved to the volunteer department's account, the city has no controls to review the disbursements "to timely detect and correct errors or misuse, if any." The auditors recommend centralized purchasing under uniform city rules. The finding does not say any money was misspent.
- Court funds (significant deficiency, recurring). Municipal court security and technology money is not kept in its own funds in the city's system.
Ten recommendations
A separate management letter lists 10 recommendations. Among them:
- General Fund spending exceeded its budget by a net $10,137, and the city has no written budget policy.
- Audit adjustments added $229,476 in unrecorded year-end bills to the General Fund's books and $442,309 to the Water and Sewer Fund's.
- The city had not paid the Howe Economic Development Corporation its share of sales tax, or moved property tax owed to the debt service fund.
- The city is almost a year behind on reconciling its bank accounts, and one water and sewer cash account was off by $17,957.
- Payroll and retirement costs were miscoded, requiring a $74,309 adjustment.
- There is no second-person review of daily cash receipts and no written procedure for approving electronic payments.
The auditors' letter to the council says they had no disagreements with management and no significant difficulties completing the work.
