State releases Highland County financial audit
By
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The financial audit for Highland County from Jan. 1, 2009-Dec. 31, 2009 has been released by Ohio Auditor of State Mary Taylor.
The audit was released Sept. 30 and the state auditor informed the Highland County Board of Commissioners of its findings.
The complete audit is available online at http://www.auditor.state.oh.us.
The state auditor issued FINDING NUMBER 2009-004, a Noncompliance Citation and Finding For Recovery, which was repaid under audit, as follows:
"During the testing of the Highland County Probation Department supervision fees, discrepancies were noted between duplicate manual receipts issued and recorded in the Department’s computer system and the amounts deposited into the county treasury. The Probation Department collects money for various fees. These fees include supervision, drug testing fees, electronic monitoring fees, in-house education and awareness classes, and community service payments. The Probation Department also collects restitution fees. Probation does not have a separate bank account; all activity is run through the County’s accounting system and deposited into the County treasury.
"During the period December 1, 2008 through July 31, 2010, the Highland County Probation Department collected $184,288 in fees but only $170,653 was deposited into the County treasury. The remaining $13,635 was not deposited into the County treasury.
At the time Probation officers collected fees from probationers, a duplicate receipt was recorded and payment was posted to the Probation Department’s computer system. It was the Probation Department’s practice to have Probation officers place monies collected into an unlocked desk drawer in the Department Coordinator Jodie Staggs’ office, until a pay-in was prepared by Mr. Staggs. Mr. Staggs was responsible for the deposit of Probation Department receipts to the County Treasury.
"In accordance with the forgoing facts, and pursuant to Ohio Rev. Code Section 117.28, a finding for recovery for public monies collected but unaccounted for is hereby issued against Jodie Staggs, Probation Department Coordinator, in the amount of $13,635 and in favor of the Highland County Adult Probation Department. The County received $13,635 as payment for this finding while under audit."
Officials’ Response from the Highland County Board of Commissioners:
"The Probation Department has enacted the policies recommended by the State Auditor to correct the problems found in the 2009 audit: maintain money in a secure location, deposit money in a timely manner, segregate the cash collection from the cash reconciliation, adopt written policies for handling money, and improve the controls over the receipt process. The sum of $13,635.00 was recovered and paid to the County by the Probation Department on September 24, 2010.
"The Highland County Board of Commissioners directed the Chief Probation Officer of the Highland County Probation Department to provide a written response to the findings of the most recent state audit. It is the understanding of this board that all the recommendations made by your staff to improve and strengthen the accounting and record keeping have been implemented; however, we have additionally asked for this to be documented to us in a written plan of action. We have also informed the Chief Probation Officer that the additional expense resulting from the increased audit time is the responsibility of the Probation Department and must be repaid to the county’s General Fund."
In a letter to county commissioners, the state auditor said: "We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Highland County, Ohio (the County), as of and for the year ended December 31, 2009, which collectively comprise the basic financial statements of Highland County’s primary government, as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit.
"We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in the Comptroller General of the United States’ Government Auditing Standards. Those standards require that we plan and perform the audit to reasonably assure whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The County has not fully paid the Auditor of State for services provided more than one year prior to our opinion date. AICPA Code of professional Conduct, ET Section 191 considers this circumstance to impair an auditor’s independence. However, Governmental Auditing Standards permit the Auditor of State to audit and opine on this entity because Ohio Revised Code §§ 117.11(B) and 115.56 mandate the Auditor of State to audit Ohio governments. Ohio Revised Code §117.13 also includes provisions to collect unpaid audit fees including negotiating a schedule for payment of the amount due and seeking payment through the office of budget and management. We believe our audit provides a reasonable basis for our opinions.
"Ohio Administrative Code §117-2-03 (B) requires the County to prepare its annual financial report in accordance with accounting principles generally accepted in the United States of America. However, as discussed in Note 2, the accompanying financial statements and notes follow the cash accounting basis. This is a comprehensive accounting basis other than generally accepted accounting principles. The accompanying financial statements and notes omit assets, liabilities, fund equities, and disclosures that, while material, we cannot determine at this time.
The financial statements do not include financial data for the County’s legally separate component units. Accounting principles generally accepted in the United States of America require the financial data for component units to be reported with the financial data of the County’s primary government unless the County also issues financial statements for the reporting entity that includes the component units’ financial data. The County has not issued reporting entity financial statements. We cannot determine the amounts of assets, liabilities, net assets, revenues and expenses that the accompanying statements should present for the omitted discretely-presented component units in order to comply with accounting principles generally accepted in the United States of America.
"In our opinion, because of the omission of the discretely-presented component units, as discussed above, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the cash financial position of the aggregate discretely-presented component units of Highland County, Ohio, as of December 31, 2009, and the changes in its financial position for the year then ended.
Further, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and each major fund, and the aggregate remaining fund information of Highland County, Ohio, as of December 31, 2009, and the respective changes in cash financial position thereof and the respective budgetary comparison for the General, Public Assistance, Real Estate Assessment, Repair Motor Vehicle License, and Board of Developmental Disabilities Funds for the year then ended in conformity with the basis of accounting described in Note 2.
"In accordance with Government Auditing Standards, we have also issued our report dated September 15, 2010, on our consideration of the County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. While we did not opine on the internal control over financial reporting or on compliance, that report describes the scope of our testing of internal control over financial reporting and compliance and the results of that testing. That report is an integral part of an audit performed in accordance with Government Auditing Standards. You should read it in conjunction with this report in assessing the results of our audit.
Management’s Discussion and Analysis is not a required part of the basic financial statements but is supplementary information accounting principles generally accepted in the United States of America requires. We have applied certain limited procedures, consisting principally of inquiries of management regarding the methods of measuring and presenting the required supplementary information. However, we did not audit the information and express no opinion on it.
We conducted our audit to opine on the financial statements that collectively comprise the County’s basic financial statements. The federal awards expenditure schedule is required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements. We subjected the federal awards expenditure schedule to the auditing procedures applied in the audit of the basic financial statements. In our opinion, this information is fairly stated in all material respects in relation to the basic financial statements taken as a whole...."
HIGHLAND COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
OMB CIRCULAR A -133 § .505 DECEMBER 31, 2009
1. SUMMARY OF AUDITOR’S RESULTS (d)(1)(i)
Type of Financial Statement Opinion Qualified
(d)(1)(ii) Were there any material control weaknesses reported at the financial statement level (GAGAS)? — No.
(d)(1)(ii) Were there any other significant deficiencies in internal control reported at the financial statement level (GAGAS)? — No.
(d)(1)(iii) Was there any reported material noncompliance at the financial statement level (GAGAS)? — Yes.
(d)(1)(iv) Were there any material internal control weaknesses reported for major federal programs? — No.
(d)(1)(iv) Were there any other significant deficiencies in internal control reported for major federal programs? — No.
(d)(1)(v) Type of Major Programs’ Compliance Opinion — Unqualified.
(d)(1)(vi) Are there any reportable findings under § .510? — No.
(d)(1)(vii) Major Programs (list): Child Support Enforcement, CFDA #93.563; Child Care Block Grant, CFDA #93.575/93.596/93.713; TANF, CFDA #93.558; Medical Assistance Program, CFDA #93.778; WIA Cluster: CFDA # 17.258/17.259/17.260.
(d)(1)(viii) Dollar Threshold: Type A\B Programs
Type A: > $ 300,000 Type B: all others
(d)(1)(ix)
Low Risk Auditee? — No.
Highland County Schedule of Findings
Noncompliance Citation
FINDING NUMBER 2009-001
2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS
REQUIRED TO BE REPORTED IN ACCORDANCE WITH GAGAS
Ohio Rev. Code, Section 117.38, provides, in part, that each public office shall file a financial report for each fiscal year. The auditor of state may prescribe forms by rule or may issue guidelines, or both, for such reports. If the auditor of state has not prescribed a rule regarding the form for the report, the public office shall submit its report on the form utilized by the public office. Ohio Administrative Code 117-2-03 further clarifies the requirements of Ohio Revised Code 117.38.
Ohio Admin. Code, Section 117-2-03(B), requires the County to prepare its annual financial report in accordance with generally accepted accounting principles. The County prepares its financial statements in accordance with the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The accompanying financial statements omit assets, liabilities, fund equities, and disclosures that, while presumably material, cannot be reasonably determined at this time.
The County can be fined and various other remedies may be taken against the County, as such, we recommend the County take the necessary steps to ensure that the financial report is prepared in accordance with generally accepted accounting principles.
Officials’ Response:
Due to the cost of conversion and increased audit costs, the County has no current plans to convert to GAAP.
FINDING NUMBER 2009-002
Noncompliance Citation
Ohio Rev. Code, Section 5705.41(D)(1), requires that no subdivision or taxing unit shall make any contract or give any order involving the expenditure of money unless there is attached thereto a certificate of the fiscal officer of the subdivision that the amount required to meet the obligation has been lawfully appropriated for such purpose and is in the treasury or in the process of collection to the credit of an appropriate fund free from any previous encumbrances. This certificate need be signed only by the subdivision’s fiscal officer. Every contract made without such a certificate shall be void, and no warrant shall be issued in payment of any amount due thereon.
There are several exceptions to the standard requirement stated above that a fiscal officer’s certificate must be obtained prior to a subdivision or taxing authority entering into a contract or order involving the expenditure of money. The main exceptions are: “then and now” certificates, blanket certificates, and super blanket certificates, which are provided for in sections 5705.41(D)(1) and 5705.41(D)(3), respectively, of the Ohio Revised Code
1. “Then and Now” Certificate – If the fiscal officer can certify that both at the time that the contract or order was made (“then”), and at the time that the fiscal officer is completing the certification (“now”), that sufficient funds were available or in the process of collection, to the credit of a proper fund, properly appropriated and free from any previous encumbrance, the Board can authorize the drawing of a warrant for the payment of the amount due. The Board has thirty days from the receipt of the “then and now” certificate to approve payment by ordinance or resolution.
FINDING NUMBER 2009-002 (Continued)
Amounts of less than $100 may be paid by the fiscal officer without a resolution or ordinance upon completion of the “then and now” certificate, provided that the expenditure is otherwise lawful. This does not eliminate any otherwise applicable requirement for approval of expenditures by the Board.
2. Blanket Certificate – Fiscal officers may prepare “blanket” certificates for a certain sum of money not in excess of an amount established by resolution or ordinance adopted by a majority of the members of the legislative authority against any specific line item account over a period not running beyond the end of the current fiscal year. The blanket certificates may, but need not, be limited to a specific vendor. Only one blanket certificate may be outstanding at one particular time for any one particular line item appropriation.
3. Super Blanket Certificate – The Board may also make expenditures and contracts for any amount from a specific line-item appropriation account in a specified fund upon certification of the fiscal officer for most professional services, fuel, oil, food items, and any other specific recurring and reasonably predictable operating expense. This certification is not to extend beyond the current year. More than one super blanket certificate may be outstanding at a particular time for any line item appropriation.
Twenty-eight percent (28%) of the purchases tested were initiated without obtaining the prior certification of the County Auditor and were not subsequently approved by the County Commissioners within the aforementioned 30 day time period.
Failure to properly encumber could result in overspending funds and negative cash fund balances. Unless the exceptions noted above are used, prior certification is not only required by statute but is a key control in the disbursement process to assure that purchase commitments receive prior approval. To improve controls over disbursements and to help reduce the possibility of the County’s funds exceeding budgetary spending limitations, we recommend that the auditor certify that the funds are or will be available prior to the obligation by the County. When prior certification is not possible, “then and now” certification should be used.
We recommend the County certify purchases to which 5705.41(D) applies. The most convenient certification method is to use purchase orders that include the certification language 5705.41(D) requires to authorize disbursements. The auditor should sign the certification at the time the auditor incurs a commitment, and only when the requirements of 5705.41(D) are satisfied. The auditor should post approved purchase commitments to the proper appropriation code, to reduce the available appropriation.
Officials’ Response:
The County has made some progress in reducing the number of purchases that were made before the purchase order was obtained. The County will continue to work with department heads to see that this improvement continues.
FINDING NUMBER 2009-003
Noncompliance Citation
Ohio Rev. Code, Section 5705.39, provides, in part, that total appropriations from each fund shall not exceed the total of the estimated revenue available for expenditure therefrom, as certified by the budget commission on the official certificate of estimated resources. During 2009, original appropriations exceeded the original estimated resources in the General Fund in the amount of $1,541,213.
Officials’ Response:
FINDING NUMBER 2009-003
The management of the County should monitor the budgetary receipts and expenditures. By regularly reviewing the budgetary documents throughout the year, the County will be better able to determine when amendments need to be made to original budgeted receipts thus avoiding negative fund/account code balances, and will be better prepared for making decisions which effect the overall cash position of the County. The County will make every effort to see that his finding is not repeated.
The financial audit for Highland County from Jan. 1, 2009-Dec. 31, 2009 has been released by Ohio Auditor of State Mary Taylor.
The audit was released Sept. 30 and the state auditor has informed the Highland County Board of Commissioners of its findings.
The complete audit is available online at http://www.auditor.state.oh.us.
The state auditor issued FINDING NUMBER 2009-004, a Noncompliance Citation and Finding For Recovery, which was repaid under audit, as follows:
"During the testing of the Highland County Probation Department supervision fees, discrepancies were noted between duplicate manual receipts issued and recorded in the Department’s computer system and the amounts deposited into the county treasury. The Probation Department collects money for various fees. These fees include supervision, drug testing fees, electronic monitoring fees, in-house education and awareness classes, and community service payments. The Probation Department also collects restitution fees. Probation does not have a separate bank account; all activity is run through the County’s accounting system and deposited into the County treasury.
"During the period December 1, 2008 through July 31, 2010, the Highland County Probation Department collected $184,288 in fees but only $170,653 was deposited into the County treasury. The remaining $13,635 was not deposited into the County treasury.
At the time Probation officers collected fees from probationers, a duplicate receipt was recorded and payment was posted to the Probation Department’s computer system. It was the Probation Department’s practice to have Probation officers place monies collected into an unlocked desk drawer in the Department Coordinator Jodie Staggs’ office, until a pay-in was prepared by Mr. Staggs. Mr. Staggs was responsible for the deposit of Probation Department receipts to the County Treasury.
"In accordance with the forgoing facts, and pursuant to Ohio Rev. Code Section 117.28, a finding for recovery for public monies collected but unaccounted for is hereby issued against Jodie Staggs, Probation Department Coordinator, in the amount of $13,635 and in favor of the Highland County Adult Probation Department. The County received $13,635 as payment for this finding while under audit."
Officials’ Response from the Highland County Board of Commissioners:
"The Probation Department has enacted the policies recommended by the State Auditor to correct the problems found in the 2009 audit: maintain money in a secure location, deposit money in a timely manner, segregate the cash collection from the cash reconciliation, adopt written policies for handling money, and improve the controls over the receipt process. The sum of $13,635.00 was recovered and paid to the County by the Probation Department on September 24, 2010.
"The Highland County Board of Commissioners directed the Chief Probation Officer of the Highland County Probation Department to provide a written response to the findings of the most recent state audit. It is the understanding of this board that all the recommendations made by your staff to improve and strengthen the accounting and record keeping have been implemented; however, we have additionally asked for this to be documented to us in a written plan of action. We have also informed the Chief Probation Officer that the additional expense resulting from the increased audit time is the responsibility of the Probation Department and must be repaid to the county’s General Fund."
• In a letter to county commissioners, the state auditor said: "We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Highland County, Ohio (the County), as of and for the year ended December 31, 2009, which collectively comprise the basic financial statements of Highland County’s primary government, as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit.
"We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in the Comptroller General of the United States’ Government Auditing Standards. Those standards require that we plan and perform the audit to reasonably assure whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The County has not fully paid the Auditor of State for services provided more than one year prior to our opinion date. AICPA Code of professional Conduct, ET Section 191 considers this circumstance to impair an auditor’s independence. However, Governmental Auditing Standards permit the Auditor of State to audit and opine on this entity because Ohio Revised Code §§ 117.11(B) and 115.56 mandate the Auditor of State to audit Ohio governments. Ohio Revised Code §117.13 also includes provisions to collect unpaid audit fees including negotiating a schedule for payment of the amount due and seeking payment through the office of budget and management. We believe our audit provides a reasonable basis for our opinions.
"Ohio Administrative Code §117-2-03 (B) requires the County to prepare its annual financial report in accordance with accounting principles generally accepted in the United States of America. However, as discussed in Note 2, the accompanying financial statements and notes follow the cash accounting basis. This is a comprehensive accounting basis other than generally accepted accounting principles. The accompanying financial statements and notes omit assets, liabilities, fund equities, and disclosures that, while material, we cannot determine at this time.
The financial statements do not include financial data for the County’s legally separate component units. Accounting principles generally accepted in the United States of America require the financial data for component units to be reported with the financial data of the County’s primary government unless the County also issues financial statements for the reporting entity that includes the component units’ financial data. The County has not issued reporting entity financial statements. We cannot determine the amounts of assets, liabilities, net assets, revenues and expenses that the accompanying statements should present for the omitted discretely-presented component units in order to comply with accounting principles generally accepted in the United States of America.
"In our opinion, because of the omission of the discretely-presented component units, as discussed above, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the cash financial position of the aggregate discretely-presented component units of Highland County, Ohio, as of December 31, 2009, and the changes in its financial position for the year then ended.
Further, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and each major fund, and the aggregate remaining fund information of Highland County, Ohio, as of December 31, 2009, and the respective changes in cash financial position thereof and the respective budgetary comparison for the General, Public Assistance, Real Estate Assessment, Repair Motor Vehicle License, and Board of Developmental Disabilities Funds for the year then ended in conformity with the basis of accounting described in Note 2.
"In accordance with Government Auditing Standards, we have also issued our report dated September 15, 2010, on our consideration of the County’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. While we did not opine on the internal control over financial reporting or on compliance, that report describes the scope of our testing of internal control over financial reporting and compliance and the results of that testing. That report is an integral part of an audit performed in accordance with Government Auditing Standards. You should read it in conjunction with this report in assessing the results of our audit.
Management’s Discussion and Analysis is not a required part of the basic financial statements but is supplementary information accounting principles generally accepted in the United States of America requires. We have applied certain limited procedures, consisting principally of inquiries of management regarding the methods of measuring and presenting the required supplementary information. However, we did not audit the information and express no opinion on it.
We conducted our audit to opine on the financial statements that collectively comprise the County’s basic financial statements. The federal awards expenditure schedule is required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements. We subjected the federal awards expenditure schedule to the auditing procedures applied in the audit of the basic financial statements. In our opinion, this information is fairly stated in all material respects in relation to the basic financial statements taken as a whole...."
HIGHLAND COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
OMB CIRCULAR A -133 § .505 DECEMBER 31, 2009
1. SUMMARY OF AUDITOR’S RESULTS (d)(1)(i)
Type of Financial Statement Opinion Qualified
(d)(1)(ii) Were there any material control weaknesses reported at the financial statement level (GAGAS)? — No.
(d)(1)(ii) Were there any other significant deficiencies in internal control reported at the financial statement level (GAGAS)? — No.
(d)(1)(iii) Was there any reported material noncompliance at the financial statement level (GAGAS)? — Yes.
(d)(1)(iv) Were there any material internal control weaknesses reported for major federal programs? — No.
(d)(1)(iv) Were there any other significant deficiencies in internal control reported for major federal programs? — No.
(d)(1)(v) Type of Major Programs’ Compliance Opinion — Unqualified.
(d)(1)(vi) Are there any reportable findings under § .510? — No.
(d)(1)(vii) Major Programs (list): Child Support Enforcement, CFDA #93.563; Child Care Block Grant, CFDA #93.575/93.596/93.713; TANF, CFDA #93.558; Medical Assistance Program, CFDA #93.778; WIA Cluster: CFDA # 17.258/17.259/17.260.
(d)(1)(viii) Dollar Threshold: Type A\B Programs
Type A: > $ 300,000 Type B: all others
(d)(1)(ix)
Low Risk Auditee? — No.
Highland County Schedule of Findings
Noncompliance Citation
FINDING NUMBER 2009-001
2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS
REQUIRED TO BE REPORTED IN ACCORDANCE WITH GAGAS
Ohio Rev. Code, Section 117.38, provides, in part, that each public office shall file a financial report for each fiscal year. The auditor of state may prescribe forms by rule or may issue guidelines, or both, for such reports. If the auditor of state has not prescribed a rule regarding the form for the report, the public office shall submit its report on the form utilized by the public office. Ohio Administrative Code 117-2-03 further clarifies the requirements of Ohio Revised Code 117.38.
Ohio Admin. Code, Section 117-2-03(B), requires the County to prepare its annual financial report in accordance with generally accepted accounting principles. The County prepares its financial statements in accordance with the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. The accompanying financial statements omit assets, liabilities, fund equities, and disclosures that, while presumably material, cannot be reasonably determined at this time.
The County can be fined and various other remedies may be taken against the County, as such, we recommend the County take the necessary steps to ensure that the financial report is prepared in accordance with generally accepted accounting principles.
Officials’ Response:
Due to the cost of conversion and increased audit costs, the County has no current plans to convert to GAAP.
FINDING NUMBER 2009-002
Noncompliance Citation
Ohio Rev. Code, Section 5705.41(D)(1), requires that no subdivision or taxing unit shall make any contract or give any order involving the expenditure of money unless there is attached thereto a certificate of the fiscal officer of the subdivision that the amount required to meet the obligation has been lawfully appropriated for such purpose and is in the treasury or in the process of collection to the credit of an appropriate fund free from any previous encumbrances. This certificate need be signed only by the subdivision’s fiscal officer. Every contract made without such a certificate shall be void, and no warrant shall be issued in payment of any amount due thereon.
There are several exceptions to the standard requirement stated above that a fiscal officer’s certificate must be obtained prior to a subdivision or taxing authority entering into a contract or order involving the expenditure of money. The main exceptions are: “then and now” certificates, blanket certificates, and super blanket certificates, which are provided for in sections 5705.41(D)(1) and 5705.41(D)(3), respectively, of the Ohio Revised Code
1. “Then and Now” Certificate – If the fiscal officer can certify that both at the time that the contract or order was made (“then”), and at the time that the fiscal officer is completing the certification (“now”), that sufficient funds were available or in the process of collection, to the credit of a proper fund, properly appropriated and free from any previous encumbrance, the Board can authorize the drawing of a warrant for the payment of the amount due. The Board has thirty days from the receipt of the “then and now” certificate to approve payment by ordinance or resolution.
FINDING NUMBER 2009-002 (Continued)
Amounts of less than $100 may be paid by the fiscal officer without a resolution or ordinance upon completion of the “then and now” certificate, provided that the expenditure is otherwise lawful. This does not eliminate any otherwise applicable requirement for approval of expenditures by the Board.
2. Blanket Certificate – Fiscal officers may prepare “blanket” certificates for a certain sum of money not in excess of an amount established by resolution or ordinance adopted by a majority of the members of the legislative authority against any specific line item account over a period not running beyond the end of the current fiscal year. The blanket certificates may, but need not, be limited to a specific vendor. Only one blanket certificate may be outstanding at one particular time for any one particular line item appropriation.
3. Super Blanket Certificate – The Board may also make expenditures and contracts for any amount from a specific line-item appropriation account in a specified fund upon certification of the fiscal officer for most professional services, fuel, oil, food items, and any other specific recurring and reasonably predictable operating expense. This certification is not to extend beyond the current year. More than one super blanket certificate may be outstanding at a particular time for any line item appropriation.
Twenty-eight percent (28%) of the purchases tested were initiated without obtaining the prior certification of the County Auditor and were not subsequently approved by the County Commissioners within the aforementioned 30 day time period.
Failure to properly encumber could result in overspending funds and negative cash fund balances. Unless the exceptions noted above are used, prior certification is not only required by statute but is a key control in the disbursement process to assure that purchase commitments receive prior approval. To improve controls over disbursements and to help reduce the possibility of the County’s funds exceeding budgetary spending limitations, we recommend that the auditor certify that the funds are or will be available prior to the obligation by the County. When prior certification is not possible, “then and now” certification should be used.
We recommend the County certify purchases to which 5705.41(D) applies. The most convenient certification method is to use purchase orders that include the certification language 5705.41(D) requires to authorize disbursements. The auditor should sign the certification at the time the auditor incurs a commitment, and only when the requirements of 5705.41(D) are satisfied. The auditor should post approved purchase commitments to the proper appropriation code, to reduce the available appropriation.
Officials’ Response:
The County has made some progress in reducing the number of purchases that were made before the purchase order was obtained. The County will continue to work with department heads to see that this improvement continues.
FINDING NUMBER 2009-003
Noncompliance Citation
Ohio Rev. Code, Section 5705.39, provides, in part, that total appropriations from each fund shall not exceed the total of the estimated revenue available for expenditure therefrom, as certified by the budget commission on the official certificate of estimated resources. During 2009, original appropriations exceeded the original estimated resources in the General Fund in the amount of $1,541,213.
Officials’ Response:
FINDING NUMBER 2009-003
The management of the County should monitor the budgetary receipts and expenditures. By regularly reviewing the budgetary documents throughout the year, the County will be better able to determine when amendments need to be made to original budgeted receipts thus avoiding negative fund/account code balances, and will be better prepared for making decisions which effect the overall cash position of the County. The County will make every effort to see that his finding is not repeated.
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