Audit report released for Nodaway County

Nodaway County officials have received a report summarizing findings from the county’s most recent external audit.

Under state law, Nodaway County is audited every two years by either the Missouri auditor’s office or a private firm. State audits primarily address administrative procedures, while private-firm audits emphasize accounting practices.

This year’s privately conducted audit was performed by the Kansas City accounting firm of McBride, Lock & Associates and covers the fiscal years ending on Dec. 31, 2013, and Dec. 31, 2014.

According to the report, the audit uncovered no “material weaknesses” — the most serious class of fiscal deficiency — with regard to the way the county handles its money.

However, “significant deficiencies” were noted in several areas.

These included an inaccurate “Schedule of Expenditures” related to federal funding for bridge construction; inadequate fiscal controls in the Nodaway County Sheriff’s Office; the lack of a formal budget for the Road and Bridge Special Sales Tax Fund created in 2014, and actual expenditures that exceeded budgeted expenditures for the Adult Abuse Fund, Senior Citizens Tax Board, Road & Bridge Special Sales Tax Fund, Assessment Fund, and Administration Center Fund.

With regard to budget overages, the county responded that the Adult Abuse Fund and Senior Citizens Tax Board are tax-distribution funds, and that it is difficult to “pinpoint the exact amounts for distributions in any given year.”

The Administration Center overage, according to the county’s response, had to do with a heating and air-conditioning project completed ahead of schedule, resulting in a vendor payment in late December before a new fiscal year began on Jan. 1.

As for the Assessment Fund, county officials explained that the overage related to a journal entry made by the collector-treasurer’s office to correct a disbursement in the amount of $157,422.

The entry was recorded in the Assessment Fund, according to the county response, and represents an accounting correction rather than overspending.

With regard to the Special Road and Bridge Fund, the county stated that money derived from the half-cent gravel tax on which the fund’s revenues are based was not spent until 2015.

While the auditors accepted the county’s responses as adequate, they noted that any expenditures in excess of budgeted amounts require formal budget modification.

At the Sheriff’s Office, the auditors noted “a lack of segregation of duties over the cash disbursements process,” meaning that the office manager, who has custody of blank checks and who signs issued checks, also reconciles the department’s bank statements.

“A person who has access to blank checks and the ability to write checks should not also reconcile the bank account,” the audit stated.

Sheriff Darren White responded that his office is working with Collector-Treasurer Marilyn Jenkins to segregate duties and improve internal auditing practices.

The significant deficiency related to federal bridge funding had to do with a Schedule of Expenditures of Federal Awards document, or SEFA, for $535,706 prepared in 2014. Actual cost to build the bridge in question was $541,769.

According to the audit, the bridge’s cost was not questioned but merely the discrepancy between the SEFA amount and funds actually provided by the U.S. Department of Transportation.

The commissioners said Wednesday that reconciling SEFAs can be problematic, since federal transportation funds are sometimes not received until the budget year after projects are completed and paid for.

A final issue raised by the auditors had to do with outstanding checks issued by the collector-treasurer’s office. North District Commissioner Robert Westfall said most of the problem relates to small checks written to citizens serving as jurors, who receive $6 a day plus, in some cases, transportation reimbursement.

In response to the audit finding, the county stated it will attempt to contact payees by both letter and telephone before entering outstanding checks as unclaimed fees after six months.