The Isanti County News Article ... the County News Website is down or I would link to them
Elizabeth Sias
The State Auditor’s report identified some concerns
regarding Isanti County’s 2011 audit.
Juli Mader from the Office of the State Auditor presented
the Isanti County Board of Commissioners at the meeting July 18 with the
county’s 2011 audit report of the financial statements of government activities
and major funds.
The purpose of the audit is to express opinions about
whether the financial statements prepared by management with the county’s
oversight are fairly presented in conformity with accounting principles
accepted in the United States, according to the Office of the State Auditor.
Overall, all significant transactions were recognized in the
financial statements in the proper period, the report stated. The statement
disclosures were neutral, consistent and clear, and no misstatements were
identified. The state auditor’s office had no difficulties dealing with
management in completing the audit.
Segregation
of duties
According to the report, several of the county’s departments
that collect fees lack proper segregation of duties.
“A good system of internal control provides for an adequate
segregation of duties so that no one individual handles a transaction from its
inception to completion,” the report stated.
Offices in the county that do not have sufficient
segregation of duties include highway, sheriff and public health. These
departments generally have one staff person who is responsible for billing,
collecting, recording and depositing receipts, as well as reconciling bank
accounts.
“Inadequate segregation of duties could adversely affect the
county’s ability to detect misstatements,” the report stated. “Due to the
limited number of office personnel within the county, segregation of the
accounting functions necessary to ensure adequate internal accounting control
is not possible. This is not unusual in operations the size of Isanti County.
However, the county’s management should constantly be aware of this condition and
realize that the concentration of duties and responsibilities in a limited
number of individuals is not desirable from an accounting point of view.”
The state auditor understands that the county does not have
the funds needed to hire additional qualified accounting staff in order to
segregate duties in every department, but recommends the county’s elected
officials and management be aware of the lack of segregation of accounting
functions and implement oversight procedures to ensure the internal control
policies and procedures are being implemented.
Monitoring internal
controls/accounting
policies and procedures
The auditor’s report also noted that an inquiry of county
management found that significant internal controls of its accounting system
have not been documented, and the county lacks written policies and procedures,
including risk assessment and monitoring procedures.
“Without formal policies and procedures including risk
assessment and monitoring procedures, the county increases its risk of fraud,”
the report stated.
The county has begun to develop formal policies that will
include these procedures, but due to limited time and resources, the county
hasn’t been able to complete the project.
The state auditor recommended that the county continue to
implement procedures to document internal controls in its accounting system,
and that a formal plan be developed that calls for assessing and monitoring the
significant internal controls on a regular basis, no less than annually.
During the review of the sheriff and jail departments,
numerous internal control weaknesses related to cash handling procedures were
noted, but new procedures have now been implemented by the departments.
Other
points of discussion:
As part of the audit, the state auditor took a sample of
expense reimbursements and credit card transactions to verify policies were
followed.
During the testing, they noted that one out of five Wright
Express card transactions included the purchase of a non-fuel item that was not
supported with a detailed receipt. Original itemized receipts should be
retained to determine the date, time and items purchased, the report stated.
Odometer readings are not required for Wright Express gas
transactions. Active monitoring of fuel purchases is important and should
include reviewing all fuel purchases for each officer and vehicle at least
monthly, as well as calculating fuel consumption for each vehicle, the report
stated.
A monthly review of fuel purchases may “disclose that public
funds were used to fuel private vehicles. Requiring odometer reading and
monitoring usage may deter abuse by the users,” the report stated.
Additionally, two out of eight employee expense
reimbursement claims tested were submitted at the end of the year for mileage
throughout the entire year. To ensure expenditures are being paid and reduce
the risk of error, the Office of the State Auditor recommended the policy be
changed to require claims for reimbursement be submitted at least monthly.
In other action, the board:
• Approved a resolution in support of a change in the
affidavit of candidacy. Currently, candidates filing for local office must maintain
residence in the district for at least 30 days, but the board feels “a serious
candidate should gain residency significantly before this date.” It is
requesting the Association of Minnesota Counties (AMC) Legislative Committee to
add the issue to their 2013 legislative platform.
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