County Auditor Suggests Accounting Changes
By Karen Gould

The county ended 2006 in the black and commissioners adopted the 2006 audit report Thursday, June 14. Commissioners agreed to send a letter to county treasurer Jane Hampton seeking corrective action on two matters cited by county auditor Anderson, Tackman and Company, PLC of Kinross.

During the audit, the firm discovered that the county is not recording in the general ledger the amount of delinquent personal property taxes that are owed to the county. The auditor recommended that the county should be maintaining subsidiary ledgers that indicate delinquent personal property taxes that are owed from each of the 11 townships and two cities within the county, for each tax year.

"It concerns me," said Chair Dawn Nelson. "I don't care if it's $20 or $200, it should be recorded. It's a receivable."

Auditors also said the county board should approve any new bank accounts before they are opened by the treasurer's office. In 2006, two new accounts were opened; after reviewing board minutes, auditors determined a request was not brought before the board.

While commissioners agreed moving revolving tax funds to other accounts may have been appropriate, they contend that in maintaining their fiscal responsibility and oversight of county funds, they need to be apprised of such transactions.

"In order to strengthen internal controls, bank accounts should be approved by the board," stated auditors in their management letter.

The audit report and management letter were presented to commissioners at a committee of the whole meeting by Ken Talsma from Anderson, Tackman and Company, Tuesday, June 12.

"He gave us two violations, and if we don't do something," said Commissioner Larry Leveille dur- ing Thursday's meeting, "then we shouldn't be sitting around this table."

In their review, auditors also noted two significant deficiencies, which have been corrected by the county. A deficiency affects the county's ability to report financial data in accordance with generally accepted accounting principles.

The county did not amend the budget to reflect additional spending in some funds, reported auditors. To correct the matter, the county now is monitoring budgets more closely and making necessary budget amendments.

Auditors also discovered a lack of checks and balances with payroll, as the deputy clerk is the only person who inputs and then reviews the data. Department heads sign time cards and then checks are issued for automatic bank deposit. A procedure now has been established for department heads to review payroll reports of employees within their department. In the past, department heads did not provide a second review of the amounts and destination of the payroll checks.

The county's fiscal year ended December 31, 2006, with a fund balance of $2,387,559, compared to $1,954,391 for 2005. Revenues received were more than expected by $235,758, with more taxes being collected than planned. Also, expenses were under budget, with less spending than anticipated in Family Court, Planning Commission, and Data Processing.

The county has the highest unemployment rate in the state, auditors cautioned, and further cuts in state funding could be forthcoming, both of which could impact the county's future revenue. To continue to maintain a healthy fund balance, auditors offered that the county "be realistic in projecting revenue for the current and future budgets in order that revenue expectations and corresponding expenses are not inflated."