SALEM — Officials are caught in an awkward standoff with an Easley firm that prepared the town’s 2007-08 independent audit as required by state law.

Although Curry & Associates has completed the audit, its certified public accountants refuse to turn over the report until the town pays them $13,000.

Salem Town Clerk Tonya Fowler claims the town does not owe them anything. In fact, she said the town already has paid $34,000 to Curry & Associates.

In the meantime, Salem hired Seneca-based CPA firm Byerley, Payne & White to prepare its own independent audit of the town’s finances. In so doing, Salem returns full circle. Byerley, Payne & White used to prepare the town’s audit reports before Curry & Associates took over the chore for fiscal year ending June 30, 2005.

The switch in CPA firms is pertinent given town officials’ startling revelations about Salem’s precarious financial situation.

At last month’s town council meeting, Mayor Diane Head allowed her staff to make public a series of fiscal irregularities and liabilities that caught residents off guard. The laundry list of problems made public included:

• Failing to pay payroll taxes on time;

• Using water department revenues to pay employee salaries;

• Having no record in the minutes of passing a 2007-08 budget;

• Discovering a $45,000 shortfall in the 2007-08 budget;

• Going 12 years without increasing property taxes; and

• Paying Curry & Associates $34,000 without a 2007-08 audit report to show for it

The situation is so dire that town officials have recruited experts with the Appalachian Council of Governments and the Municipal Association of South Carolina to help clean up the mess.

In his one public comment on the situation, former longtime Mayor Thurman Coward said everything could be explained if he had been approached.

Coward and the 2006 town council were the focus of a South Carolina Law Enforcement Division investigation that looked into complaints of abuse of power and Freedom of Information Act (FOIA) violations.

SLED completed the investigation this year. The thick report was sent to the Tenth Circuit Solicitor’s Office, but Solicitor Chrissy Adams kicked it up to the state Attorney General’s Office to avoid any conflict of interest issues.

The Daily Journal/Messenger recently inquired about the case with the Attorney General’s Senior Executive Assistant Gene McCaskill but did not receive a response.

A review of audits on record for the town shows that Salem was warned as early as 2001 by Byerley, Payne & White that its accounting practices could lead to potential errors. In that report, the CPAs wrote that “matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the Town of Salem’s ability to record, process, summarize and report financial data consistent with the assertions of management in the financial statements.”

The auditors also pointed out that weaknesses in “one or more of the internal control components” could result in “misstatements in amounts that would be material in relation to the financial statements being audited,” and which could go undetected within a timely period.

In keeping with Head’s directive to forge ahead and not look back, town officials are not bent on getting into a fight with Curry & Associates to get the financial audit report they feel they’ve more than paid for. Instead, they are willing to wait for Byerley, Payne and White to complete the 2007-08 audit.

“We just want to start from scratch and get what we need to get rolling,” Fowler said.