Still, Rushton & Company returned a clean opinion.
"It looks a little different than it used to look," said Chris Hollifield of Rushton & Company during a recent county commission meeting. "Our profession has changed the layout of that. It really says the same thing, except you'll see the terminology in there that says 'unmodified' now instead of 'unqualified,' which was used to refer to a clean opinion. We have a good clean opinion."
In its Report on Internal Control and Other Matters, Rushton & Company identified several material weaknesses and three significant deficiencies in the internal controls of Habersham County, as well as two instances of material noncompliance or other matters.
"We did have some comments in there that management has addressed on how those will be corrected going forward," Hollifield said.
Several of the auditors' comments were directed to accounts that are controlled by constitutional (elected) officers outside the county commission. Those include the probate court, sheriff's department, and tax commissioner.
Current year audit comments include:
* "There is a lack of sufficient internal controls in the probate court, which is due to inadequate segregation of duties. The result is that the probate judge maintains the checkbook, prepares and makes deposits, writes and signs all checks, and prepares all bank reconciliations."
Management response: Management advised the judge to properly segregate duties immediately upon receipt of the comment from the county auditors.
* Due to incorrect software entries in the tax commissioner's office, the subsequent payouts of the current period's receipts exceeded the ending reconciled cash balances.
Management response: Management advised the tax commissioner to implement a monthly review process to reconcile subsequent payouts with ending reconciled cash balances.
* Bank reconciliations were not completed for five bank accounts at the sheriff's office.
Management response: Management advised the sheriff that monthly reconciliations for all bank accounts should be completed.
* Receipts for the sheriff's department are not being deposited in a timely manner, but rather once or twice per month on average.
Management response: Management advised the sheriff to make at least weekly deposits.
* Receipts for county transit are not being deposited in a timely manner, but rather are being made once a month on average.
Management response: Management advised the department head to implement at least weekly deposits.
* There were instances where deposits for occupational tax were not made timely. Receipts were held for seven or more days before depositing in nine of 25 (36 percent) of receipts tested.
Management response: Management advised the department head to make at least weekly deposits.
* Capital asset additions and dispositions were not reconciled from the capital asset listing to the general ledger.
Management response: Management advised the department head to have the capital asset listing reconciled to the general ledger on a monthly basis.
* County personnel may require additional training in the application of generally accepted accounting principles and the preparation of financial statements. Currently, the county relies on the external auditors for technical assistance, but future changes to auditing standards could state that providing technical assistance would impair the independence of the external auditor. "This does not indicate that the finance director is not trained to perform the daily accounting functions, but that the county has elected as a cost benefit to outsource this expertise to their auditors," the audit report states. "As required, we have indicated this as a significant deficiency in our letter on internal control and compliance."
Management response: "Habersham County management agrees with this finding and understands the requirement ... to issue this statement as a significant deficiency," the report states. "All employees of the board of commissioners finance office will continue to seek training in the application of generally-accepted accounting principles in the preparation of the county's financial statements. Until such time as it is financially feasible for the county finance staff to prepare the county's financial statements, the finance office will continue to rely on an independent auditor to prepare them."
* Three out of 25 (12 percent) of building permit receipts tested involved permit fees that were incorrectly calculated; and 10 out of the 25 (40 percent) of the permits recalculated required inquiry of permit office staff to determine how the fees were calculated.
Management response: Management advised the department head to place supporting documentation for the calculation of the fees in the permit files, with someone reviewing the calculation before the permit is issued.
* Tag and title back-outs in the tax commissioner's office did not have the original supporting documentation to explain the reason for the adjustment and to show proper review and authorization. Five out of the 20 transactions (25 percent) tested lacked original supporting documentation.
Management response: Management advised the tax commissioner that original supporting documentation should be retained for all back-outs, documenting the reason for the adjustment.
* The county experienced a material excess of expenditures over appropriations in the general fund, jail special revenue fund, emergency 9-1-1 special revenue fund, hotel/motel tax special revenue fund, and Special Purpose Local Option Sales Tax debt service fund.
Management response: The county manager continuously reviews the comparative financial statements to budget and recommends any necessary budget revisions to the board of commissioners.
* The county used SPLOST proceeds for a project that was not specified as an approved purpose in the SPLOST 4 referendum.
Management response: Finance personnel will review all proposed SPLOST projects for compliance with the appropriate referendum and state law prior to presentation to the board of commissioners for approval.
"It certainly was not without a few challenges this year with the staff turnover and things, trying to put some hands on some things and get things tallied, but we got a good audit for here," Hollifield said. "But we've got a clean opinion, just like we always have."
Mike Barden was named Habersham County chief financial officer in early August, while Phil Sutton was named county manager in late August and began work in September.
"It was a little bit of a slow go this year because of the new personnel, and Mike just getting in and trying to get his feet wet," Hollifield said. "He did a super job, and all the staff did in getting us everything we needed. It just took a little bit longer here and there to put our hand on it."
Barden discussed one item disallowed by auditors, who said it was an ineligible sales tax purchase.
"There were repairs and maintenance on the DFCS building that were inadvertently charged to the SPLOST 4 account," Barden said. "Since this activity had not been specified in SPLOST 4 referendum, the SPLOST account was reimbursed by the county's general fund."
Barden said Rushton & Company does a compliance audit of the SPLOST accounts as a part of the overall audit.
In Habersham County, 48 percent of revenue is derived from property taxes, while 23 percent is received in the form of sales tax. The remainder of revenue is as follows: 12 percent in charges for services; 7 percent in grants and contributions; 6 percent is insurance premium tax; 3 percent from other tax; and 1 percent each in intangible tax and other miscellaneous revenue.
Chris Hollifield of Rushton & Company holds up a copy of the Habersham County FY 2013 audit. (Photo/Rob Moore)
http://accesswdun.com/article/2014/1/269394