The annual state audit report of DeKalb County government, released last Thursday, reveals fifteen findings and recommendations, including four in the office of the county mayor.
(CLICK THE FOLLOWING LINK TO VIEW THE ENTIRE STATE AUDIT OF DEKALB COUNTY GOVERNMENT)http://www.comptroller1.state.tn.us/repository/CA/2011/dekalb.pdf
Two of the findings relate to the landfill but County Mayor Mike Foster, in an interview with WJLE Monday, said neither pose major concerns and there are no fines or penalties as a result of them.
The state found that the “Solid Waste Disposal Fund had a deficit of $931,422 in unrestricted net assets as of June 30, 2011. This deficit resulted from the recognition of a liability totaling $3,181,491 in the financial statements for costs associated with closing the county’s landfill and monitoring the landfill for 30 years after its closure. Generally accepted accounting principles and state statutes require that such costs be reflected in the financial statements. This deficiency exists due to the failure of management to correct the finding noted in the prior-year audit report”.
This is not the first time the county has been “written up” for this. Foster said it has become an annual finding of the state. The county is expected to provide financial assurance of a funding mechanism for performing post-closure corrective action at a closed solid waste landfill that may cause some type of contamination in the future. According to the state, the county is $931,422 short of meeting that obligation, which could come to as much as $3.1 over the next 30 years.
According to Foster, the county has not had to spend a lot of money fixing problems at the old landfill locations, some of which have been closed for decades, and doesn’t foresee having to spend anywhere near $3.1 million on them within the next thirty years. “We had a fund balance (money in the bank) of $1,669,863 for the landfill at the beginning of the year. They (state) are saying that it could potentially could take over three million dollars over the next thirty years for post closure where you have to come in and do work on it or something. One of the landfill sites on the Clyde Moore Road has been closed for 21 years but last year was the first money we spent on it since I’ve been in office. It had settled and we had to put some dirt on it. We spent about $40,000 basically on dirt. They (state) are saying that there could potentially be more than three million dollars in liability but realistically we know that is way too high. They (state) are saying you (county) should put money in the bank to cover that (correcting potential problems) for thirty years. That’s not realistic. Even if we ask the state auditor, the supervisor of auditors, and CTAS (County Technical Advisory Service), none of them recommend that you (county) put money in the bank. Its just a finding under the GASB 54 governmental accounting standards program that we have to agree to do. Its just an accounting thing. We’ve put $200,000 in the budget this year for post closure in case there’s a blow out, a leak, or something that would require us to do some work on one of the old cells that has been closed for over twenty years. We have four old landfill cells that are closed and two which are in the act of being closed. The ones now being closed are tied to the landfill we are still using,” said Foster.
The second finding in the audit report related to deficiencies in the collection procedures for landfill tipping fees.
The report stated that “In some instances, the landfill did not deposit funds collected for tipping fees within three days of collection. State law requires county officials to deposit public funds to the office bank account within three days of collection. The delay in depositing the funds increases the risks of fraud and misappropriation”
The report further stated that “The County Mayor’s Office did not issue receipts for tipping fees received from the landfill. State law required official pre-numbered receipts for all collections. This deficiency increases the risk of fraud and abuse”.
According to the report, “Weight tickets generated at the landfill are pre-numbered; however, we noticed a few tickets that were not accounted for properly. Since these tickets were not available for examination, we could not determine their disposition. This deficiency increases the risks of fraud and abuse.”
Foster said the county will comply with the state’s recommendation” What they (state) are saying is in some instances the landfill did not deposit funds collected for tipping fees within three days of collection. Some days over there (landfill) there may not be any (tipping fees). Other days there are some (tipping fees). They (landfill operators) will usually make one trip over here (courthouse) in a week to bring them in. They were bringing them to our office. They were just turning them in here and we would work them and send out the bills. But they (State) are saying they want the supervisor at the landfill, instead of bring them to us (courthouse) to take them straight to the trustee at least every three days. So instead of him coming here, he’s just going to make two trips a week out there (trustee’s office). It saves us from having to do an itemized inventory of them and give him a receipt for them when he has already seen them, brought them in, and turned them in. We will follow their recommendations (state) exactly. From now on he will take them to the trustee, and turn them in twice a week so there’s no more than three days. Most of the (tipping fee customers) are billed. They have an account and they just bring in the bill. We’ve had some who will pay, like if they’re bring in shingles, they might write a check or pay cash to them (at landfill) and that money is put in a lock box over there which is basically a vault and then turned in later. We’ve already initiated this, but they (state) want us to keep an individual log. Whoever is working the scales is to put down the ticket number and sign every ticket that goes through there and then he is to log it in so that we have a backup. We had not been doing that. They had just been keeping up with the tickets and then turning them in,” said Foster.
A third finding in the audit report related to “the actual beginning fund balances (cash on hand to start the new fiscal year) of the general, local purpose tax, general debt service, and general capital projects funds differing from the estimated beginning fund balances by material amounts. A similar finding was made in the general purpose school and central cafeteria funds in that the actual beginning fund balances at July 1, 2010 exceeded the estimated fund balances presented to the county commission by material amounts.
The actual general purpose fund balance for July 1, 2010 was $2,939,357 compared to the estimated fund balance of $2,388,804, a variance of $550,533
The actual Local Purpose Tax Fund Balance for July 1, 2010 was $1,002,724 compared to the estimated fund balance of $754,347, a variance of $248,377
The actual General Debt Service Fund Balance for July 1, 2010 was $1,495,094 compared to the estimated fund balance of $1,407,016, a variance of $88,078
The actual General Capital Projects Fund Balance for July 1, 2010 was $3,730,040 compared to the estimated fund balance of $4,135,629, a variance of $405,589
The audit report states that “Sound business practices dictate that realistic estimates of beginning fund balances should be presented to the County Commission during the budget process. This deficiency is due to management’s failure to correct the funding noted in the prior-year audit report and to properly estimate the actual ending fund balance for June 30, 2010, which resulted in materially inaccurate estimates of beginning fund balances”
The state recommends that “Estimates of the beginning fund balance should be made on a more realistic basis to provide county officials with accurate information to base funding decisions. The estimated beginning fund balance should be amended during the year when it becomes apparent that the original estimate varies from the actual by a material amount.”
In response, Foster said actual fund balances for the beginning of the fiscal year cannot be known for certain while budget preparations are underway, and according to the 1993 budget act, the county cannot alter its proposed budget after mid June until after it has been adopted by the county commission in August. “When we start working on budgets, usually in February, we estimate what we think we will have (fund balance) at the beginning of July. Under the laws of the 1993 budget act we cannot do anything to the (proposed) budget after June 15 once we get it situated. We have to approve the budget by the middle of August under the 1993 act. When we put these numbers in here we estimated that we would have $2,388,804 in the general fund balance. We actually has $2,939,357 which is $550,553 more than we said we thought we would have. Part of the reason we had more than expected is because we didn’t spend all that amounts that were budgeted. It’s the same for the other funds noted in the audit report. We over estimated on three funds and we under estimated on one. We have already made some corrections and we will be correcting these others. All this amounts to is having more money in those funds than we thought we were going to have when we passed the budget. Under the 1993 act, we can’t amend the budget after June 15, but we have no way of knowing in June what this is going to be by August,” said Foster.
The final audit finding in the office of County Mayor related to “deficiencies noted in the maintenance of payroll records”.
According to the report, “Time sheets for employees of the Solid Waste Department were not signed by a supervisor as evidence of review and approval. Sound business practices dictate that time sheets should be properly reviewed and approved. This deficiency is due to a lack of management oversight. When supervisors do not review and approve time sheets, the risks that improper payments could result increases.”
The report further stated that “The chief deputy at the Sheriff’s Department and the Veteran’s Affairs Officer did not have time sheets on file to support their payroll disbursements. According to the sheriff, the chief deputy does not prepare a time sheet because he is a salaried employee. The Veteran’s Affairs Officer is a part-time employee and does not earn leave, therefore, the county has not required him to submit time sheets to support his salary. The failure to submit time sheets could result in improper payroll payments.”
The state recommends that “Supervisors should sign the employees’ time sheets as evidence of review and approval. All employees should maintain and attendance records.”
In response, Foster said that “the solid waste department is the only branch of county government that has an actual time clock. They clock in and clock out. The supervisor over there looks at it (time sheets), makes sure that its right, and then brings it in to our office and the employees are paid. He (supervisor) looks at every one of them and the clerk here (courthouse) looks at every one of them. But they (state) are saying that he (supervisor) needs to sign them. Even though he already checks every one of them (time sheets), he will initial them now,” said Foster.
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