Audit calls for health district to make changes

Financial reports, documentation of grant funds and expenditures need improvement

GRANT COUNTY — In a audit report released Sept. 16, the state auditor's office disclosed its latest review of the Grant County Health District which reported two significant findings.

Those findings include insufficient record keeping of its financial reports and lack of internal controls to ensure compliance with grant requirements.

The audit period beginning January 2003 through December 2004 found the health district had not been making monthly inspections between its accounting records and those of the county treasurer's office, where its financial reports are compiled. Also, the report identifies there were insufficient internal controls to ensure compliance of grant requirements.

As stated in the audit report, 22 people are employed by the GCHD which has an annual operating budget of $1.6 million. The district is governed by three elected Grant County commissioners and six other representatives appointed by the county's municipalities.

Without monthly and year-end reports, the audit report stated, the health district is unable to keep an accurate record of its accounting or assure taxpayers of how money is being spent.

The health district works on a cash basis, so when a bill comes in it gets paid. However, said GCHD board member Lee Blackwell, the county treasurer has an accounting system based on accrual which accounts for money as it is expected to be received.

"It's not a misuse of funds or lack of attention, it's just different systems that have to be worked out," Blackwell said.

The health district usually receives audits every two years, but since it spent more than $500,000 in federal funds during 2004, an audit of its federal programs was required.

Blackwell said the state auditor will be doing an audit of the county in the coming months, and at that time will recommend they too go to a cash basis accounting system to keep records between their office and the health district consistent.

The audit report also states the health district did not have an outside party review grant reimbursement claims for accuracy. Documentation of expenditures for grant funds was also noted as insufficient in demonstrating the health district complied with grant availability requirements, the audit stated.

Non-compliance with grant requirements can lead to loss of grant monies.

Blackwell said the health district has not lost any of its grant monies, but has been asked to keep a more complete record of grant programs and expenditures.

Recommendations by the auditor's office call for the health district to establish internal controls of both its accounting practices and documentation of federal grant requirements.