The state audit of the county’s finances for the year ended June 30, 2008, was released last week. In addition to providing the final financial picture at the end of the fiscal year, the audit includes “findings,” or problem areas in the budgets, along with recommendations.

The Director of Schools’ office had the largest number of findings, several of which were related to alleged criminal activity for which indictments were handed down.

• There was a cash shortage of $12,499.19 as a result of cash collections for land leases and various other cash collations that had not been deposited with the county trustee. The Director of Schools had notified the Comptroller of the shortage, which was found when the finance director  noticed that lease revenues varies significantly from year to year, then found that cash collections had not been remitted to the trustee. After further investigation, the Sheriff’s Department was contacted and Sharon Laycock was ultimately indicted. She had turned in $3,500 that she claimed had fallen down to the bottom of her desk. The auditor recommended that the director strengthen the internal controls of the office by segregating the duties and providing adequate supervision. Specifically, the auditor said reconciliation of deposits with the county trustee should not be done by the person collecting the money.

• The audit found that expenditures exceeded appropriations in the cafeteria fund by $174,057. It also noted that spending exceeded appropriations by smaller amounts in six major categories in the school general fund. This was also a finding last year. It noted general fund budget amendments had been posted to the accounting records without being approved by the county commission and the cafeteria fund did not stay within spending limits.

• Some invoices were paid without documentation that goods had been received or services rendered.

• There were deficiencies in the administration of payroll records. In some instances, time and attendance records were not required for maintenance employees to support payroll disbursements. In other cases, time records were not signed by supervisors.

• A maintenance employee used school department equipment and materials for his personal benefit totaling $1,047.45. the director of schools explained that a welding machine and associated materials were stored at the employee’s home until a proper and secure place could be found at one of the schools. They were returned after an allegation of misuse. Following an investigation by the TBI, Fred Wilcoxon entered into a plea agreement and agreed to make restitution. The audit recommended that management should not allow department property to be stored on employee’s property and department property should not be used for the personal benefit of employees.

There were two findings for the office of County Executive.

• Accrued vacation leave balances exceeded the maximum leave provided by the county’s personnel policy. Auditors noted that several employees had accrued vacation leave balances beyond the 15 days allowed by the policy. The auditor recommended that management monitor employee leave balances. County Executive Mike Stinnett responded by noting the County Commission has appointed a committee to revise the personnel policy and implement policies that will prevent accumulation of excess days.

• Deficiencies were noted in a proposed library construction project. For the second year, auditors noted that the county issued a $50,000 capital outlay note  in 2006 to help with the library project but the project has not begun and funds have not been returned. The auditor said funds for construction of the library should be spent by the county in compliance with county purchasing laws and regulations, not by a nonprofit. Stinnett noted that the county has filed suit to recover the funds.

There were three findings for the Road Superintendent’s office.

• Some invoices were paid without documentation that goods had been received or services rendered. This was also a finding last year.

• A county road list was not submitted to the county commission in accordance with state law. The list is to be submitted in January and include classification, width and distance of each county-maintained road, with a summary of changes from the prior year. The road list was submitted in May but did not include a summary of changes. This was also a finding last year.

• There were deficiencies in the computer system backup procedures: System backups were not stored off-site on a regular basis, a backup log was not maintained, and yearly backups were not stored off-site. The auditor noted backups are needed to protect against loss of data.

The audit noted that the offices of county executive, road superintendent, director of schools and trustee did not implement adequate controls to protect their information resources, but added the vulnerabilities were corrected after they were brought to the officials’ attention.

For the offices of County Clerk and Sheriff, collections were not deposited within three days of receipt. This was also a finding last year.

The Clerk of Courts office was also listed for deficiencies in the computer system backup procedures. Auditors said backups should be performed on a routine basis and system backups should be stored off-site for protection of data. This was also a finding last year. Further, the audit noted the office did not review software audit logs to be sure all changes were appropriate.

Other findings:

• The Director of Accounts and Budgets did not maintain the accounting records for the Road Department. Polk county operates under the Fiscal Control Acts of 1957, which calls for the budget director to maintain Road Department records, but this has never been done.

• Duties were not segregated adequately in the offices of county executive, road superintendent, director of schools, trustee, county clerk, clerk of courts, clerk and master, register of deeds and sheriff. Employees responsible for maintaining accounting records were also involved in receiving, depositing and/or disbursing funds. The audit notes this lack of segregation of duties is the result of management’s decision based on lack of finding for additional personnel. This has been an audit finding for years.