Tattnall County Financial Audit Shows Several Deficiencies, Most Same as Previous Year

The Tattnall County Board of Commissioners recently received their report on the FY 2017 (ending September 30, 2017) financial audit conducted by Lanier, Deal, & Proctor, CPAs out of Statesboro.

The Commissioners held a special-called meeting to review the audit findings, but AllOnGeorgia was not notified of the meeting so the audit was provided after filing an Open Records Request on May 8.

BASICS:

At the end of the Fiscal Year, the county reported:

• $6,442,381 in cash assets
• $5,780,434 in total liabilities
• $647,883 in unanticipated revenues collected (taxes, licenses, fees)
• the county spent $608,418 less in expenditures than budgeted

Expenditures exceeded appropriations for the year ending September 30,2017, in the following departments for the general fund:

Tax commissioner – $36,693
Tax Assessor – $6,678
State/Superior Court – $ 38,513
Sheriff – $22,330
Jail – $86,574
Fire and rescue – $121,034
Ambulance service – $31,638
Animal control – $23,375
Roads – $28,871

The overexpenditures in these areas were funded by underexpenditures in other departments. The auditor also made note that the firm did not audit the county SPLOST funds or financial statements.

THE DEFICIENCIES

The county was cited for eight deficiences, the majority of which were highlighted in the previous year’s financial audit. At that time, the county said new policies were implemented to address the concerns of the auditor. The verbiage for the explanation provided by the county in 2017 is the same as it was in 2016.

The 2017 deficiencies, which sums to eight, include:

• Financial reporting process is inadequate for recording the activity in the County’s agency funds and crtain special revenue funds.
  • The county has several agency funds and special revenues funds for which a trial balance summarzing the annual activity and year end balances is not maintained. The auditor said amounts due from agency funds are not properly recorded
    • COUNTY RESPONSE: We concur with this finding, and we will consult with our auditors on developing the appropriate procedures to prepare accurate trial balances at year end for our agency funds and special revenue funds not maintained on our computerized accounting system.
• Recording of year end accruals for the financial statements
  • The County’s procedures to make sure all year end accruals such as receivables, accounts payable, prepaid items, and deferred revenue included in the financial statements are in the financial statements are inadequate. Many of the adjusting journal entries needed to record these accruals were material to the County’s financial statements.
    • COUNTY RESPONSE: We concur with these findings and we will implement procedures to make sure all accruals are included in the year-end financial statements.
• Recording the activity of cash accounts by other departments
  • County has some cash accounts that are reported in the general fund whcih are maintained by other departments. The activity for these accounts is not being properly recorded in the general fund. We recommend that the activity for the Sheriff bond fee account, DARE account, Sheriff petty cash account, and jury account be submitted to the County’s accounting department on a monthly basis to be recorded in the general fund on a timely basis.
    • COUNTY RESPONSE: We concur with this finding, and we will request that the activity for these cash accounts be submitted to the County’s accounting department on a monthly basis to be recorded in the General Fund.
• Accounting for capital leases
  • During our audit we noted new capital leases for $290,290 for road equipment that were not recorded in the County’s financial statements. Also, the budget was not amended to reflect the new capital leases entered into during the year. At the inception of capital leases at the governmental fund reporting level, expenditures and other financing source called “proceeds from capital leases” of an equal amount should be recorded at the net present value of the future minimum lease payments.
    • COUNTY RESPONSE: We concur with this finding, and we will implement procedures to make sure that as new capital leases are entered into, a copy of the lease agreement is forwarded to the Finance Manager who will be responsible for recording the capital lease in the County’s accounting records.
• Accounting for capital assets
  • We noted that the County does not have a process to accumulate information on additions and disposals to capital assets and has not designated a person to be responsible for maintaining capital asset records. The County should have procedures in place that require each department and/or accounts payable personnel to forward any information to the designated person responsible for maintaining capital assets records. The information accumulated on additions and disposals should be provided to the auditors after the County’s fiscal year end.
    • COUNTY RESPONSE: We concur with this finding, and we will implement procedures requiring each department to forward any information on capital purchases and disposals to the person responsible for maintaining the capital assets records.
• Interfund balances and transfers
  • We noted that several interfund balances and transfers were not reconciled for the year ended September 30,2017 resulting in adjusting journal entries that were material to the County’s financial statements. Interfund balances and transfers should be reconciled on a monthly basis.
    • COUNTY RESPONSE: We concur with this finding, and we will begin reconciling interfund balances and transfers on a monthly basis.
• Bank reconciliations
  • During our audit, we noted that monthly bank reconciliations were being performed, but were incomplete. Specifically, they contained unreconciled differences. Adjusting journal entries were required to properly state cash balances as of September 30, 2017, requiring additional time of audit staff. We recommend that unreconciled differences be investigated and corrected in the period they occur.
    • COUNTY RESPONSE: We concur with this finding, and we will implement procedures to prepare accurate bank reconciliations on a monthly basis.
• Allocation of employee health insurance to county departments
  • During our audit, we noted that employee health insurance was not properly allocated to the appropriate County departments for two months. This caused employee health insurance expense to be overstated for general administration and understated for other County departments. Monthly financial statements and general ledger activity should be reviewed by the Finance Manager or County Manager to ensure that all transactions are properly posted within the County’s general ledger.
    • COUNTY RESPONSE: We concur with this finding, and we will implement procedures to have the Finance Manager and/or County Manager review monthly financial statements to ensure employee health insurance expense is properly allocated to all County departments each month.

2017’s first seven deficiencies are the same as the first seven in the FY 2016 report’s first. The distinguished difference in 2016 dealt with the Tax Commissioner’s office and in FY 2017 the last deficiency addresses employee health insurance.

Here are the 2016 deficiencies, all reported by the same auditor in the previous year:

You can read the FY 2017 financial audit in its entirety below. The FY 2016 is below that.
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