The annual state audit of the DeKalb County government has resulted in four findings with apparently no major deficiencies or problem areas being identified.
(CLICK THE LINK BELOW TO VIEW DEKALB COUNTY AUDIT REPORT. READ FINDINGS ON PAGES 186-191)
FY15DekalbAFR.pdf (1.72 MB)
The Tennessee Department of Treasury’s Division of Local Government Audit today (Friday, February 26) released the Annual Financial Report of DeKalb County for the year ended June 30, 2015.
The findings in the audit are recurring and have been cited in previous years audit reports. Detailed findings, recommendations, and management’s response are included in the Single Audit section of this report
“Overall DeKalb County had a good clean audit. You never know what unfunded mandates might be coming down from the state and federal government. As of now DeKalb County is financially stable and we want to stay that way in the future. We always want to look ahead to make sure we maintain financial security. In 2015 the anticipated revenues were on target and we did a good job at holding down our expenditures,” County Mayor Tim Stribling told WJLE.
The following are summaries of the audit findings and recommendations:
*Office of County Mayor:
The Solid Waste Disposal Fund had a deficit in unrestricted net position.
The Solid Waste Disposal Fund had a deficit of $3.7 million in unrestricted net position. This resulted from the recognition of a liability totaling $6.7 million in the financial statements for costs associated with closing the county’s landfill and monitoring the landfill for 30 years after its closure. The county intends to fund this liability on a pay-as-you-go basis. 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. County officials should develop and implement a plan that would fund the deficit in unrestricted net position.
It is not the first time the county has been “written up” for this. 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 $3.7 million short of meeting that obligation, which could come to as much as $6.7 million over the next 30 years.
“As far as the solid waste disposal fund that had a deficit of $3.7 million, the state would like for us to fund that each year in our budget even though we wouldn’t be using it during that year the state wants us (county) to set that money aside for the closing of the landfill and the monitoring of the landfill for 30 years after its closure. But the county funds this liability on a pay as you go basis. The solid waste disposal fund is a proprietary fund that has a liability for the closure and post closure costs for the life of the landfill. DeKalb County does some of the closure and post closure work ourselves to cut down on the costs and the closure and post closure costs will be spread out over several years as each cell has needs,” said County Mayor Stribling.
*Office of Circuit, General Sessions, and Juvenile Courts Clerk:
Execution docket trial balances for Circuit and General Sessions Courts did not reconcile with general ledger accounts
Execution of docket trial balances for Circuit and General Sessions Courts did not reconcile with general ledger accounts by $6,725 and $2,937, respectively. Therefore we were unable to determine if the clerk had complied with provisions of the Unclaimed Property Act. The statute provides that any funds held by the courts for more than one year and unclaimed by the owner are considered abandoned and should be reported and paid to the State Treasurer’s Office in Compliance with state statutes. TCA (state law) further requires these funds to be reported and paid to the state Treasurer’s Office. This deficiency exists due to the failure of management to correct the finding noted in the prior-year audit report
*Offices of Circuit, General Sessions, and Juvenile Courts Clerk and Register of Deeds:
Multiple employees operated from the same cash drawer
Good internal controls dictate that each employee have their own cash drawer, start the day with a standard fixed amount of cash, and remove all but that beginning amount at the end of the day. This amount should be verified to the employee’s receipts at the end of each day. Failure to adhere to this control regimen greatly increases the risk that a cash shortage may not be detected in a timely manner. Furthermore, in the event of a cash shortage, the official would not be able to determine who was responsible for the shortage because multiple employees were working from one cash drawer. This deficiency has been a management decision by the officials resulting in a loss of control over assets and is the result of management’s failure to correct the finding noted in the prior year audit report. Officials should assign each employee their own cash drawer.
*Offices of Road Supervisor, Trustee, Register of Deeds, and Sheriff
Duties were not segregated adequately. Officials and employees responsible for maintaining the accounting records in these offices were also involved in receipting, depositing, and/or disbursing funds. Sound business practices dictate that management is responsible for designing internal controls to give reasonable assurance of the reliability of financial reporting and of the effectiveness and efficiency of operations. This lack of segregation of duties is the result of management’s decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transaction. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report. Officials should segregate duties to the extent possible using available resources
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