The Daviess County operational audit report, prepared by the office of Missouri State Auditor Susan Montee, was recently released.
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This audit was conducted from March to June, 2009, with four staff members of the auditor’s office involved. Recommendations to correct problems were made to each entity; a summary of recommendations and responses focuses on the county’s Developmentally Disabled Board, prosecuting attorney’s office, sheriff’s office, and 911 Emergency Response.
Operational audits are conducted every two years and are intended to evaluate the county’s internal controls over management and financial functions, to evaluate the county’s compliance with certain legal provisions, and to evaluate the economy and efficiency of certain management practices and operations, including certain revenues and expenditures.
The scope of the Daviess County audit included, but was not necessarily limited to the two years ended Dec. 31, 2008. Recommendations to correct problems were made to each entity. Summarized findings and responses are as follows:
Developmentally Disabled Board
Unauthorized disbursements totaling $24,700 were made by the former treasurer of the Developmentally Disabled Board to herself, and were not detected timely due to poor oversight by the board and a lack of controls over the disbursement process.
The fraudulent transactions occurred between 2005 and 2008. Charges were filed and the former treasurer pled guilty to felony stealing and forgery in the Daviess County Circuit Court in November 2008, and was sentenced to probation and 90 days in prison, and ordered to pay restitution totaling $24,700.
Monthly financial reports were either not prepared or were not presented to the board for review at board meetings consistently, and bank reconciliations were not performed. No record of the cash balance available was maintained and bank statements were not reviewed by the board. The board did not always ensure bids were solicited or retain bid documentation for purchases. In addition, adequate documentation is not retained to support some disbursements.
Developmentally Disabled Board response: Procedures have been developed for monthly financial reports to be prepared, including detailed disbursement information which is reviewed and approved monthly by the board. Monthly bank reconciliations are now performed and a board member reviews and verifies that the reconciled balance agrees to the checkbook balance monthly. Checks are now issued in numerical order. Bid documentation for items over the statutory threshold is now maintained and reasons bids are not taken will be documented in the future. We will also ensure documentation is maintained to support all disbursements in the future.
County Property Records & Procedures
Physical inventories of capital assets owned by the county are not performed annually. The county does not have formal procedures for disposing of county owned property. In addition, the road and bridge department and the sheriff’s office do not maintain any records of vehicle or equipment usage/mileage or fuel and maintenance costs. Individual fuel tickets are not submitted to the county clerk’s office for comparison to the vendor billings before payments.
County Commission’s response: The need for updated capital asset lists will be discussed with elected officials at budget time. During 2010, we will ensure the various audit recommendations related to capital assets are implemented. Polices will be developed tracking vehicle fuel usage and maintenance data. This data will be periodically reviewed. By March 1, 2010, we will ensure fuel tickets are submitted and reviewed before the vendor is paid.
Prosecuting Attorney Procedures
The Prosecuting Attorney does not adequately perform bank reconciliations, no book balance is maintained, and a liabilities list is not prepared and reconciled to the available cash balance in the checking account. In addition, monies received are not always deposited timely, and the composition of receipt slips issued is not compared to the composition of bank deposits.
Prosecuting Attorney’s response: Recommendations have been implemented. We are in the process of going through old records to identify the remaining payees for monies on hand when I took office. We have exhausted all efforts to locate any other missing records from the prior administration. Every effort is made to account for the numerical sequence of checks. If the auditors identified any check numbers missing from my ledgers this was simply an oversight. Currently, the numerical sequence of checks is accounted for adequately.
Sheriff’s Controls and Procedures
Accounting duties are not adequately segregated in the Sheriff’s office, and adequate controls over seized property have not been established.
Sheriff’s response: Steps have been implemented to review monthly accounting records. As the newly elected Sheriff, when I took office the property room was in disarray. Steps were taken and the property room has been organized and inventoried. A property room sign-in sheet has been implemented to track who and when the property room was entered.
Central Dispatch for Emergency Services Board
The Central Dispatch Emergency Services Board approved incentive payments totaling $700 and $590 to employees during December 2008 and 2007, respectively. In addition, employee time sheets are not approved and signed by employee supervisors, and property tags are not affixed to some assets and all information applicable to an item is not included in the records.
911 Administrator’s response: I will discuss with the board the need to establish these incentives formally through a pay agreement, which will be kept in each employees personnel file. I agree to ensure that time sheets be approved by an appropriate supervisor and to establish adequate records to account for capital assets. I agree that property control tags should be affixed to all capital asset items.
The following auditors participated in the preparation of this report: Director of Audits Alice M. Fast, CPA, CIA, CGFM ; Audit Manager Todd M. Schuler, CPA; In-Charge Auditor Julie A. Moulden, MBA, CPA; Audit Staff Karla Swift, MBA.
Complete reports are available online at www.auditor.mo.gov.
Kevin G. Hudson, Certified Public Accountant, has been engaged to audit the financial statements of Daviess County for the two years ended Dec. 31, 2008. He has been working since July but the county has not yet received the results.