Chowan selects new firm for audit

J.P. Timberlake didn’t bid

By Vernon Fueston
The Chowan Herald

Sunday, April 19, 2009

Chowan County Commissioners agreed to replace longtime auditor J.P. Timberlake of Edenton with another firm after Timberlake elected not to seek a new contract.

The commissioners last week selected Martin Starnes and Associates of Hickory. Timberlake had audited the county’s books for more than two decades.

The county sent out 42 bid requests to firms around the state but only two companies submitted bids for the job. Timberlake was not among them.

In the end it came down to a choice between Starnes and the firm of Pittard, Perry and Crone of Belhaven.

Finance Officer Lisa Jones recommended the commissioners select Starnes even though the company’s $48,000 contract was $7,000 higher than its competitor.

Jones said she based her recommendation on Starnes’ expertise in the area of local government accounting. The firm handles 27 county and municipal governments around the state.

She said Pittard does the audit work for only one county.

Regionally, Camden, Pitt and Nash counties are served by Starnes.

Last year, Timberlake’s firm was questioned why county commissioners were surprised to learn from state officials in July that the county’s budget faced a potential shortfall of nearly $4 million and was at risk of failing to cover an upcoming $1.1 million debt payment.

The county’s debt, according to the state Local Government Commission, had accumulated over the previous few years while former County Manager Cliff Copeland was at the helm, and the county had used up much of the $29.1 million from the sale of Chowan Hospital to help prop up the general fund. Also, revenue projections were over-estimated, the LGC stated.

After that news broke, Timberlake defended his audits and said that he raised red flags as far back as 2004 that the balance of unrestricted net assets had begun falling, from $12.3 million in June 2003 to $8.4 million by June 2004.

Although the audit covered numerous expenses related to Hurricane Isabel, Timberlake noted the county was reimbursed for 95 percent of its Isabel-related expenses, so the hurricane should not have had much of a negative impact on the budget.

Commissioners said they trusted Copeland, whom they said told them each year that he had the county’s spending under control.

Although many cities and county boards of governments receive in-person audit reports each year on the state of their finances, Timberlake said he was never asked to make a presentation to the Chowan commissioners about his annual findings.

“I really felt the commissioners were in line with (Copeland) and understood and actually knew what was going on,” Timberlake said last August.

In the meantime, current County Manager Peter Rascoe succeeded Copeland, who retired last June, and Rascoe instituted a number of budget cuts. The commissioners also approved a tax increase to satisfy the Local Government Commission that Chowan’s finances were back on track.

Jones said the fact that only two firms bid on the county’s work was not unusual.

She said many firms replied that their workloads would not allow them to take on the contract.

Commission Chairman Eddy Goodwin asked if the price quoted included personal appearances before the commissioners to answer questions.

Jones said the firm’s quote allowed for unlimited consultations on-site.

Rascoe said the state’s Local Government Commission suggests counties rotate accounting firms every three years.

The county has used J.P. Timberlake as its auditing firm since 1985. Before that, Chowan had used Timberlake’s prior partnership, Timberlake and Sykes, going back to 1978.

Assistant News Editor Bob Montgomery contributed to this report