Residents and city employees are still asking why, despite several warnings from auditors, it took city officials six years to identify and act on cash receipting problems.

Former city treasurer Joyce Wilson pleaded guilty last week to bilking the city of more than $240,000 from January 1988 to October 1994.In a letter dated as early as Nov. 30, 1990, the auditing firm of Phelps, Wanlass and Associates warned city officials about its cash management procedures. Of concern was the fact that utility billing receipts were accounted for separately and not recorded through the city's cash register with other daily receipts.

"This procedure has been discussed with the Treasurer's Office and implementation of the following controls should be considered," the letter said. Those controls included receipting and validating utility billing receipts through the cash register, including utility billing bank deposits with other daily receipts, and attaching a copy of the daily bank deposit slip to the daily receipt reconciliation sheet. They also suggested the treasurer's fidelity bond needed to be renewed and secured.

A little over a year later, in a letter dated Jan. 20, 1992, then-auditor Carl Wanlass again warned city officials of concerns about internal cash controls.

"I am not being critical of any employee's performance, in fact, in light of the technical knowledge of accounting and internal control systems, the city's administrative staff should be commended for their performance," Wanlass wrote.

Former Mayor Guy Cash said: "As I remember back, yes, we did have concerns. Our audits always came in A-1; that (cash receipting) was the only expression of concern. There was never any indication it was a major problem. We left it up to Carl."

Wanlass, who did the city audits for four years, notes that pressures for growth and increased standards of accountability required changes so material weaknesses did not develop within the city's financial operations.

In retrospect, Wanlass said: "The procedures we used didn't indicate problems. We'd never seen any funds misappropriated. Cash is difficult to track."

He again suggested items that could be improved upon so a "constructive process" could begin. No. 1 on the list was cash controls including receipting of utility billings; insuring daily deposits; and improving daily cash reconciliation sheets.

Wanlass continued to suggest the city automate its cash receipting process, but Cash said Wilson always balked at the suggestion.

"She always sort of gave an impression of ignorance," Cash said. "She'd say, `I just don't know how to do it (automated receipting). Let's just stay like we have it.' "

At the beginning of the current administration Wilson was again asked to begin the cash receipting. "She was asked early on in the new administration and I started asking her in July. I told her it had to be in place and thought she needed some training," Mayor Bill Gibbs said. "I didn't know she had already received a receipting machine and it was under her desk."

It wasn't until the last quarter of 1994, from auditors' findings and the insistence of city administration to start automated cash receipting, that Wilson's misappropriations were discovered.

"It was like finding out your mother is stealing," Cash said. "I feel terrible about it."