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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 4 findings
F1
Page 31
The County renewed the independent audit contract with B.B.&R.
F2
Page 31
The exclusion from the Balance Sheet of physical assets valued at less than $5,000 will understate the actual value of property, plant and equipment held by the County. Such an exclusion may be material. Furthermore, expensing physical assets that have a useful life of more than one year presents an unclear picture of current year operating expenses and makes it difficult to analyze the government’s financial performance.
F3
Page 32
The County of Napa contracts with B.B. & R. to provide independent audit services. Due to the required implementation of GASB-34, the County sought additional outside professional services (accounting services) to assist with the work associated with this endeavor. The County of Napa enlisted the services of B.B. & R. to establish Pro-Forma Financial Statements for the FYE 2001.
F4
Page 33
It is apparent that Trust Fund accounting needs further attention. As of June 30, 2001 total cash and investments in the county treasury per financial statements are $286,540,045. Even small errors or incomplete work by the Auditor-Controller’s office may have significant impact upon the accounting of public funds. The Grand Jury notes that the independent auditor did not include any comments on the accounting of Trust Funds in its prior two Management Reports (Year Ended June 30, 2000 and Year Ended June 30, 2001).
Recommendations 4
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R1Page 31While the Grand Jury finds no material fault with the services provided by Bartig, Basler & Ray, the Grand Jury believes that it would be prudent for the county to contract with a different accounting firm to provide its annual independent audit after the current contract with Bartig, Basler & Ray is completed. While such a change may cause the county to pay more for the required auditing services, the Grand Jury believes that such a change is warranted in order to ensure a freshness in the opinion formed by the independent auditor with regards to the county’s financial statements and as well, its consideration of the County of Napa’s internal control over financial reporting. Response Requested From County Board of Supervisors County Executive Officer County Auditor-Controller
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R2Page 32The Board of Supervisors should review the accounting decision made by its adoption of Resolution 01-83, Policy For Budgetary Controls. The Grand Jury recommends that the Board of Supervisors reduce the value of those physical assets to be included in the County’s Balance Sheet to $750 with a useful life of more than one year for an individual item, or, $500 with a useful life of more than one year for items purchased in bulk, such as road signs, office fixtures and furnishings and similar items. Physical assets purchased by the county with a useful life of less than one year should be expensed. The adoption of such a modification in policy would better reflect the County of Napa’s actual assets when identified separately from infrastructure assets such as roads, buildings and bridges. Such a policy modification would better reflect the current year expenditures in the County of Napa Annual Financial Report, provide easier analysis of original budget and revised budget figures, increase the usefulness of prior budget year comparisons to current and future years budgets, and also allow users (including the public) to assess the government’s ability to estimate and manage its general resources. Response Requested From County Board of Supervisors
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R3Page 32The Grand Jury believes that undetected potential problems could occur when the accounting firm providing the independent audit is also conducting other accounting or consulting services. This is a basic separation of duties issue, and the above-described situation should not be repeated. In the future, the County of Napa should segregate accounting and independent audit services performed by outside companies. Response Requested From County Board of Supervisors County Executive Officer County Auditor-Controller
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R4Page 33The Board of Supervisors, County Executive Officer, and the citizens of Napa County should expect that the Trust Funds held by the County of Napa be accounted for in a thorough, timely and accurate manner. Work not done at the close of accounting periods is work done poorly. The Board of Supervisors and County Executive Officer should instruct the independent auditor to review the Trust Fund accounting system, its internal control structure and procedures, and report to the Board of Supervisors those matters which it considers to be material or worthy of consideration. Response Requested From County Board of Supervisors County Executive Officer County Auditor-Controller