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Audit report shows no serious problems

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By Jonna Spelbring Priester

General Manager

Once a year, they descend upon government agencies throughout the state.

Auditors – either independent or state employed – visit city and county governments to assess the body’s finances. The process can take as little as a couple of weeks or more than a month.

Frequently those audits turn up little, though some audits reveal major problems. Sometimes the audits will reveal small items that could cause a problem if left unchecked.

In Henry County, the auditors examined the fiscal court’s financial statements — as they do every year — to examine the accounting principals used and the overall status of the county’s financial statements.

However, the auditor’s report clearly states that the fiscal court’s financial statements represent, fairly, the financial position of the county. But while there were no major flaws, auditors made three notes about their findings.

Henry County Judge-Executive John Logan Brent said he actually looks forward to the audit. “The way I see it, that’s my safe guard,” he said. “When they leave and everything checks out all right, that lets me know that everything is as it should be.”

And in this case, Brent said, the audit served its purpose. Auditors almost always find something to point out, or something that could, be done differently. That doesn’t necessarily mean county employees are doing something wrong.

The first note on the auditor’s report states simply, “the county does not have a sufficient understanding of the information presented in the financial statements.”

Among the issues the auditors pointed to were a $7,036 adjustment to the general fund to correct a prior year “error.” That, Brent said, was tied to documentation for the payroll of Property Valuation Administrator Greg Derossett. Derossett is paid out of two funds, the general fund and the E911 account, and the auditors considered documentation for that to be in error. While nothing illegal or inappropriate, it was more of a procedural issue, Brent said. “I’d say more than anything, it’s just a learning process to get things as (the auditors) want them,” he said

The note also targets the emergency management account, which generally has no more than $2,000, but were “not properly included in the general fund.” The auditors noted that the country treasurer, Mary Scriber, does not receive or review the bank statements for the emergency management accounts.

Brent said that for 20 years, Emergency Management Director Bruce Owens has handled that account. “This is the first year (the auditors) said the emergency management account needs to be run through the county treasurer for dual accounting,” Brent said, adding that in the past, emergency management has been audited individually.

Additionally, the auditor’s first note said that three deposits were recorded in incorrect revenue accounts, and that one expenditure was posted to an incorrect account number. Scriber said that while she tries to prevent that from happening, occasionally, an entry might not be entered into the correct account.

Among those items, Brent said, was what should have been a transfer from the jail account for housing juveniles into the regular jail account. In doing so, the county failed to complete the paper trail to reflect such a transfer.

Finally, for the first note, fixed/capital assets were noted as not being added to or removed from the fixed/capital asset lists. In the audit, the auditors recommended the county update its fixed/capital asset list “in accordance with its approved capitalization policy.”

As part of the auditor’s report, the county’s response to each note is included. For the first note, the county responded that the bank balances were corrected as of Aug. 1, and that “treasurer will be more aware of account balances. Due to a lack of personnel, some things just don’t get done.”

In the second note, auditors stated that the county does not keep a list of employee pay rate schedules. While Brent said the county does have a list of employee salaries, it does not maintain a list of what their next raise would be. Doing so, Brent said, would be overkill — during budget meetings, magistrates are made aware of what the county salaries are, and what impact a raise would mean. In most cases, that means they know individual employee salaries, with the exception of road department drivers and EMTs.

Scriber said the auditors were looking for classifications of employees, something Henry County does not do.

Finally, in the audit’s third note, auditors said that the schedule of federal financial assistance did not include all federal awards spent. Among those awards included $19,942 that Brent indicated was handled by Owens. He added that it may simply have been an oversight that the grants were not included.

Overall, Brent said he was comfortable with the audit. Mistakes can, and will, be made, he said, despite better efforts. He added that auditors will find something. “That’s what they’re here for,” he said. “It may be totally different from one year to the next.

“I feel good going into our audits because I have two honest people working for me. The treasurer has been here 20 years or more, and the deputy judge-executive has been here six years.”

The auditors’ job, he stressed, is to make sure that the county isn’t mishandling its funds. “I doubt there are very many counties in the state that went through an audit without any recommendations,” Brent said. “I serve on a health board. I serve on the Tri-County (Community Action Agency) board. I’ve served on various boards that have been through audits, and usually, there’s one or two recommendations at the end of each audit. To me, the main purpose of an audit is to make sure there are no improprieties going on.”

Audits catch improprieties like a case in Owen County, where the county treasurer was charged with first degree official misconduct. Owen County Judge-Executive Billy O’Banion was found to have been paid $6,000 too much in training incentives over two years. O’Banion was charged with theft, theft of services and two counts of first-degree official misconduct before his charges were reduced to four counts of official misconduct.

“That’s an example of the auditing process doing exactly what it’s supposed to do,” Brent said.

In Henry County, nothing so glaring was found. “The auditors told us there’s nothing wrong, there’s nothing missing, money’s not being mishandled,” Scriber said.

 

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