Melissa Ille of Adams, Brown, Beran and Ball prefaced Barton County’s 2015 audit report to the Barton County Commission on a positive note.
“We are issuing a clean audit,” she said. She gave a quick overview during the commission’s Monday morning meeting after having previously gone over it in detail during a recent study session.
The commission unanimously voted to accept the report as presented.
But, there were a few issues in the report, which covered the financial condition of Barton County from Jan. 1 through Dec. 31, 2015.
First, there were two “material deficiencies,” she said. Number one, the County Treasurer’s Office didn’t make the tax distributions in a timely manner and second, the county had a negative cash balance in the amount of $1,555 in the motor vehicle tax license fees fund.
Although both of these are violations of state statutes (the first being more severe), Ille said she wasn’t aware of any legal consequences as of this time.
Then, Ille turned to the management letter which referred to internal controls of financial reporting. The auditors found two deficiencies.
• Referencing the recent scam in which the County Treasurer’s Office wired over $48,000 to a bank in Georgia, Ille said management should not use its authority to override internal controls that are in place. “The county treasurer circumvented the county’s process for paying accounts payable in May 2016.”
This transaction did not have the proper approval by County Commission and was determined to be a phishing scam rather than a true county expenditure, she said.
“We recommend that the county disburse, to all employees, a summary of the proper procedures to be followed for making purchases on behalf of the county and requesting payment for those purchases,” she said. Ille said County Administrator Richard Boeckman had already distributed this information to county personnel.
• Proper internal controls should be in place to ensure that the monthly transactions are accurately recorded and monitored. As of Dec. 31, 2015, there were 49 checks listed on the outstanding check list that were either never printed or mailed to the intended recipients, she said.
These checks were written in August and September of 2015 and totaled $143,110. In addition, another check written on Nov. 11, 2015, to the county treasurer for $41,107 was listed on the same outstanding check list.
“It was not necessary for this check to be written but rather a transfer of cash between funds should have taken place to process the revenue as tax receipts,” Ille said. “This situation made it necessary for us to post material adjustments to the county’s financial statements.”
ABBB recommended the monthly bank reconciliations be reviewed and approved by the county treasurer each month. The treasurer should be signing or initialing the bank reconciliations to indicate his agreement with the accuracy of the reconciliation.
“During this review process, the outstanding check list should be evaluated for items not clearing the bank in a timely manner and such items should be further investigated,” she said.
Next, Ille turned to the governance letter. It noted there were no significant difficulties in dealing with the county in completing the audit.
However, there were recommendations to “improve operational or administrative efficiencies and for improving internal controls.” Ille touched on three of these from the current year.
• The auditors recommended the County Treasurer’s Office review its internal procedures for processing added, abates, and specials to ensure that these items are being processed in a timely manner.
• They recommended the county enforce its written policy pertaining to “comp” time not being allowed to carry forward to the next year. As of Dec. 31 , 2015, the county still owed employees $840 in unpaid comp time.
This is short for compensatory time. It refers to the practice of allowing an employee to take extra time off from work after a long week, instead of being paid overtime wages.
• At Dec. 31, 2015, there were 40 checks listed on the outstanding check list for the treasurer’s tax distribution account that exceeded two years in age. These outstanding items need to be reviewed and checks reprinted for the intended recipients or funds should be submitted to the Kansas State Treasurer’s unclaimed property department.