When consultant Pam Meadows and her CIC team were hired in May to help clean up a tax and bank reconciliation mess in the Barton County Treasurer’s Office, they had distinct goals – pave the way for a June 5 tax distribution, rectify the 2012 tax rolls and reconcile several 2013 bank statements.
“We have completed all of these,” said Meadows, government manager for Computer Information Concepts. She addressed the Barton County Commission Monday morning to give an update on the costly, time-consuming project.
The effort proved more challenging than expected, she said. But, it did uncover over $500,000 sitting in a bank account of which county officials were unaware.
The county contracted with CIC to clear up the reconciliations for a cost of up to $20,000. CIC is the company from which Barton County purchased its new county-wide bookkeeping system.
However, Meadows said the company spent 10 more hours than planned. So, the commission voted to increase pay to CIC to $21,450.
Meadows said they had the distributions (payment of tax dollars collected to other entities in the county) ready their second day on the job. However, the 2012 tax roll was another matter.
“That took a little longer than anticipated,” she said. They just recently got this completed.
In essence, she said, total payments from taxpayers were all being entered as tax revenue. But, portions of some of those payments also included interest and fees on delinquent taxes, and these should have been tracked separately.
So, when they ran totals, they were consistently off, she said. After sifting through individual receipts totaling $60 million, they finally found the $18,000 discrepancy.
“He would not have been able to find that on his own,” Meadows said in defense of beleaguered County Treasurer Kevin Wondra. She attributed the problem in part to the change over to new accounting software.
The bottom line, she said, was the tax total for 2012 should be about $40.4 million. There is still about a $6,700 difference, but that is as close as they can calculate.
In all, CIC helped reconcile 28 bank statements across nine accounts, Meadows said. Most were no big deal, but one involved strictly credit and electronic payments and it was a massive headache.
With this statement, the information on the origin of a transaction was scarce at best, she said. Patterns did arise, but not without a lot of effort.
“We talked about some ways to make it easier,” Meadows said. For one, Wondra’s office will visit with the bank about including more information.
After they were done, they found the county had $581,000 more in the bank than it had in its books. Of that, about $200,000 was from 2013 and the rest from 2014.
If there had to be an error, Meadows said it was better to be like this than be in the hole.
More work needed
However, despite the progress, Vickie Dreiling of Adams, Brown, Beran and Ball said her staff still needs further details on eight of the bank accounts from the Treasurer’s Office before it can complete the delayed county audit. This information was promised by Wednesday.
If this happens, she said they will pay one last visit to the courthouse on Thursday. Then, after at least two weeks for an internal office review, the audit will be ready for approval by the commission.
The commission must have the audit before it can complete its budget planning process.
“Things are square,” Meadows said. “They (Treasurer’s Office personnel) understand the importance of keeping bank statements reconciled. The process is good. The data going forward is good.”
She said she is confident the office can keep things on track now, if they maintain this level of commitment. “They just got overwhelmed and behind.”
There is a clear procedure to keep tax payments separate from interest and fees, Wondra said. In addition, he has learned he needs to spread the office workload and cross train better, check bank statements daily online and keep better notes in case someone else has to handle a different task.
The change over in software, turnover in personnel and additional responsibilities mandated by the state contributed to the backlogs, Wondra said.
“Lots of money has been spent to get to this point,” commission Chairman Kenny Schremmer said. He wanted assurances things would change for the better and Wondra offered those assurances.
But, “talking about it is one thing, doing something is another,” Schremmer said.
Commissioners asked Wondra offer a follow-up report on the steps he’s taken.
To produce a budget, county officials need total expenditures from the previous year and expected revenue for the coming year. This is the purpose of the audit.
The hang ups were tax rolls and county bank accounts that had not been reconciled by the County Treasurer’s Office. Without these figures, Adams, Brown, Beran and Ball couldn’t finish its work, work the auditors had until July 1 to complete.
What the lack of these numbers means is that the county’s total revenue and total expenditures couldn’t be determined. These are necessary to come up with the amount of cash the county will carry over into the following year, figures needed to determine the mill levy.
Without the mill levy, there can be no budget.
Tax roll reconciliation involves making sure all the adjustments made to incoming taxes (in the form of abatements, refunds, and added and escaped taxes) balances with the money in the county’s tax fund. This was a difficult year for officials in that they started the tax season with one software system and concluded with a new one.
The tax rolls in question had been unresolved since late last year and are for taxes from 2012.
The banking issue involves a series of accounts at one local banking institution. Some of these had not been balanced since April 2013.
As long as the final reconciliation numbers are available by the first part of July, Boeckman said the county would be fine. However, later than that, then a budget extension may be necessary.
What is an extension? Barton County Clerk Donna Zimmerman said her office that handles these.
Periodically, she said, entities can’t meet their budget deadlines. So, they forward an extension request and budget documents to the county clerk who approves the change.
This is not uncommon and the approval is pretty much a given, Zimmerman said. She does send the information to the state just to keep officials in the loop.
Normally, the county wraps up its budget by the first meeting in August, Boeckman said. The process could drag on to the end of the month without the need for an extension.
The additional time granted usually amounts to about a week or two.
However, Zimmerman said, time does become a factor. There is a set-in-stone Nov. 1 deadline by which she has to had all of her numbers submitted to the state.
Before this can happen, her staff has a lot of work to accomplish compiling data and reports. So, they had to had enough time to get this done within that time limit.
Should the Commission not be able to meet its requirement by the mandated deadline, the county would be out of compliance with state statutes.