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County financial report finds four deficiencies

During the Dec. 6 meeting of the Audit Committee, Melissa Steagall-Jones of Blackburn, Childers and Steagall presented an overview of the 2013 comprehensive annual financial report.
Washington County received an unmodified opinion from BCS on governmental activities during the fiscal year ending June 30. In general, the county was determined to be a low-risk auditee.
Four significant deficiencies in internal control are reported in the Schedule of Findings and Questioned Costs.
The first from the current audit year is unauthorized spending by the Board of Education to replace the roof at Fall Branch Elementary School.
“No county funds may be expended without the approval of the legislative body,” Steagall-Jones said, referring to this as a first-time finding for the BOE.
According to the audit, bids were taken, a contract signed and the project completed without requesting or receiving an amendment to the budget.
“Was this just oversight, or was it an emergency?” committee member Paige Carter asked.
Steagall-Jones said there is an allowance for emergencies, but that was not the case here.
“I think the board just didn’t understand (the process),” Schools Finance Director Beverly Thomas said.
Monitoring of the Fuel Man system’s use policies by the Washington County Sheriff’s Office is another finding during the current audit year. The purpose of the Fuel Man system is to accurately track fuel purchases and use in county-owned vehicles. According to the audit, several instances were noted of noncompliance by the WCSO, including use of prohibited grades of fuel and improper input of vehicle mileage.
“The sheriff was very gracious and said it would be taken care of, but this is on our radar screen as high risk,” Steagall-Jones said. “We won’t wait another three years to look at this again.”
Commissioner Pat Wolfe asked if the WCSO was the only office reviewed. Steagall-Jones said the auditors usually rotate reviews of the offices that use the Fuel Man system, but they may look at all three next year. “Our responsibility is to identify the high-risk areas,” she said.
Also discussed were a couple of significant deficiencies from the prior year’s audit that had not been implemented.
One was the adoption of the annual budget no later than the third Monday in July.
Mayor Dan Eldridge said the commission was on track to pass the budget presented in June. “As you remember, it got hung up with the delay in the capital bond offering and we lost two months,” he said.
Eldridge said there were a lot of commissioners who didn’t understand the operating budget could not be approved without first knowing how the capital projects planned for the year would be handled.
A system to track the county’s fixed assets was another significant deficiency identified in last year’s audit, though Steagall-Jones said she thinks the county is making progress.
“We have established a policy and it is back on the agenda for the December meeting,” Eldridge said. “We would like to get this off the findings.”
Though not listed as a significant deficiency, Steagall-Jones did point to the deficit in the Food Service budget for county schools.
“A variance of almost $500,000 is a pretty big miss, and that’s a little concerning,” she said. “They indicated a rate increase was put in and people stopped participating.”
Commissioner Mitch Meredith asked if fewer participants wouldn’t reduce food costs.
“It did, but not not enough to offset (the difference),” she said. “The budgeted amount was lower than 2012, but not low enough. We need to determine if that will be a trend.”
Wolfe made a motion, seconded by Carter, to recommend the acceptance of the 2013 financial report from BCS. The motion passed with unanimous approval.
County commissioners were expected to vote on the recommendation during their Dec. 16 meeting. The audit must be submitted to the state comptroller’s office by Tuesday, Dec. 31.