Plumas County Grand Jury • 2012-2013

A County Still Struggling Plumas County Audit Report Executive Summary:

Published: ∼ June 30, 2012 9 pages

Findings and Recommendations 6 findings

F1 Page 13
The audit found four recurring deficiencies. These are repeats of prior year findings. a. Lack of Timely Processing: Disbursements were paid in excess of 30 days past the invoice date of the vendor billing. The Auditor staff was not able to perform this function in a timely manner due to the departments not submitting claims for payment to the Auditor’s office in a timely manner. b. Sheriff Inmate Welfare Reconciliation: Although the Inmate Trust bank account is being reconciled to the accounting records on a monthly basis, the balance held in the account does not appear to be reconciled to an open listing of balances held for each inmate. The County could not provide a listing of balances held for inmates that reconciled to the bank balance. c. Compensated Absences: For the close of FY 2011/2012, the audit exposed a negative balance of $25,202 in the County’s Compensated Absences Account. In simple terms, the County paid out over $25k to employees for vacation time, leave time, and comp time before the benefits were earned. d. Risk Management – Landfill: The County does not have adequate insurance coverage for the landfill.
Related Recommendations (1)
R1
Page 14
The Grand Jury recommends that the County immediately correct the deficiencies found during the audit. These are repeats of prior year findings. a. Modify procedures to ensure that County departments submit invoices to the Auditor for processing and payment in a timely manner. b. Reconcile the Inmate Trust bank account to an open listing of balances held by each inmate on a monthly basis. The detailed listing of inmate balances should be printed and maintained as an audit trail showing that this procedure was performed. c. Review balances of compensated leave on a regular basis to determine that employees are not being paid for more time than what has accrued. d. Maintain adequate insurance coverage for the landfill to minimize the risk of loss. e. Take steps to re-negotiate its employee retirement and sick leave policies to be more in line with other counties of similar size and population.
F2 Page 13
The audit found two new items requiring correction this year: a. Outside Bank Accounts: There is an inadequate review of all outside bank accounts. Various departments of the County hold bank accounts outside the County Treasury for which the purpose of these accounts is to collect credit card payments. There are several accounts that the County Auditor Controller’s office has not been obtaining monthly bank statements and reconciliations from the departments and the reconciled balance for one bank account had not been recorded on the general ledger of the County. Animal Control: There is a lack of controls within the Animal Control department and department employees are not following policies and procedures. Even though the Animal Control department is not authorized to accept cash, the department still accepts cash and an employee writes a personal check to cover the amount of cash received, deposits the personal check with department deposit, and takes the cash. Good internal control requires proper cash handling. The risk of errors or irregularities is increased when department employees are not following proper policies and procedures. Plumas County Audit Report
Related Recommendations (1)
R2
Page 14
The County needs to correct the deficiencies found during the audit. a. Record on the County general ledger all bank accounts in the County’s name, reconcile all outside bank accounts, and forward the information to the Auditor Controller monthly. b. All County departments must follow County policies and procedures for cash handling. c. All department employees must follow policies and procedures. Plumas County Audit Report CONCLUSION: Turning the Ship Around For the past several years, Plumas County has shown little interest in tackling the County’s financial problems and getting its fiscal house in order. It seemed the attitude that prevailed from the Board of Supervisors all the way down to every department was, “we just have to hang in there for a while, get by with less, and all will be right again.” This attitude resulted in the County spending more on public services and its own processes than it was taking in. During these years, Plumas County has shown a lack of cohesive teamwork with each department competing with other departments for the limited funding. In simple terms, not working together, but fighting together. This conflict was in fact the major reason the previous County Auditor Controller resigned in early 2012. The Grand Jury is pleased to report that there is a new attitude coming to the fore in Plumas County. It is an attitude of determination and self-responsibility. This is good to see. Perhaps last year’s stinging report from the Grand Jury had a positive effect. No one knows for sure, but there is definitely a new attitude in the halls of the County Courthouse these days. The transition from not taking responsibility to one of shared responsibility was not easy. This is to be expected when any type of positive change occurs. Positive and effective change is always met with resistance, from within and from without. However, to the County’s credit, it seems to have come thru this rough period intact, and is now on a new path of teamwork and constructive problem solving. This does not mean that all is well and no problems exist. Plumas County has monumental challenges that must be met in the coming years. The County must be determined to maintain conservative administrative practices regarding the County’s financial management in order to avoid further erosion of its economic base. This report is focused only on the audit report for FY 2011/2012, and does not show the positive changes that are taking place behind the scenes this year. The current fiscal year (FY 2012/2013) is the first year in recent memory in which the County is operating under a balanced budget. In August 2012 with the implementation of several budget workshops and the help of a sharp and strong local budget consultant; a balanced budget was hammered out. The Grand Jury has no audit report information that confirms this, but according to the Plumas County Auditor, the fiscal bleeding appears to have stopped and one can hope that next year’s Grand Jury report will show that the County has got its fiscal house in order. Although the County is still in poor financial shape, it seems the ship is turning around and heading in the right direction. Plumas County Audit Report
F3 Page 14
The General Fund’s Unassigned Fund balance is down from $410,299 in 2011 to zero as of June 30, 2012.
No recommendations for this finding
F4 Page 14
The County’s Reserve Fund has been used to cover temporary shortfalls and to pay bills. GASB 54 (Governmental Accounting Standards Board) calls for a target balance of 8% of the previous year’s General Fund revenues, or a minimum of $2 million to be in the Reserve Fund account. The Reserve Fund balance was $454,253 as of June 30, 2012.
No recommendations for this finding
F5 Page 14
Over the last 11 years, the County has spent on average $397,353 more per year from the General Fund than it is taking in.
No recommendations for this finding
F6 Page 14
The County Auditor reported that the County has not been funding its Retiree Health Benefit Program. As such, the potential liability to the County as of this writing is approximately $5.4 million dollars.
No recommendations for this finding

Conclusions 2

No Responses Found 1

Government entities assigned to respond to this report. No response documents have been linked in our database.

Plumas County Board of Supervisors Elected County Office