State finds issues with Grant County financial reports

EPHRATA — State auditors found problems with Grant County’s financial reports and are in the process of issuing findings.

The auditors presented three findings to the commissioners, the county auditor, treasurer, public works and Grant Integrated Services employees during the exit conference Tuesday. The auditors looked at accountability, financial statements and federal program compliance in 2008.

Jake Santistevan, a state assistant audit manager, broke the first finding into two parts, pointing at issues the county faced switching from a accrual basis accounting system to a cash basis system.

The change, instituted in 2008, moved the county to reporting the money it received and spent, rather than reporting the money the county expects to receive and spent, county Auditor Bill Varney said. The change makes the reports easier to put together, saving the county money.

“I’m not sure that I can think of very many examples that were very large in any way where there was actual errors,” Santistevan said. “It’s just a matter this is the county’s first time preparing financial statements in the cash basis format for many years.”

The assistant audit manager said the county did significant research, but some areas were missed. He noted $170 million in four payroll and clearing funds and 16 agency funds where the county didn’t report because they wouldn’t have under the previous system.

“It sounds like a lot, and it is, but they’re not actually the county’s operation,” he said. “It’s money that’s collected on behalf of other agencies and individuals.”

The finding also noted 14 federal grants were missed when the county reported how much money was spent.

“We found a number of grants that were federal in their origin and they went through a state agency and they came to the county. When you go to a department and say, ‘Is it federal?’ They know it’s federal in origin, but somewhere in communicating that information into the accounting department, that was lost,” Santistevan said.

The office recommended additional training, establish a process to improve communication between departments and have someone track grants to make sure they’re reported correctly.

Santistevan said previous issues with how the financial statements were prepared have been solved.

The other two findings focused on reports being submitted for grants. The first noted a $330,051 U.S. Department of Agriculture grant spent on video conferencing equipment for Grant Mental Healthcare.

“Basically, the grant requires a financial status report and a project performance activities report to be submitted within 90 days … and at the end of each calendar year as well,” Santistevan said. “We went in and did our audit we didn’t find that it occurred.”

He said it appears the executive director left around the time the report would have been filed. Since the director solely handled the reports, and no one else was aware of the requirement, the reports weren’t filed.

The reports are now filed, Santistevan said.

“To be fair, we spoke with the granting agency and they were aware it needed to filed. They weren’t particularly concerned,” he said. “We would prefer not to report this in a finding, but we’ve got a requirement and we’ve got two reports that were required to be filed and they weren’t, so it’s really 100 percent not compliant.”

Reports were also missing for a $187,000 U.S. Department of Health and Human Services grant to the Prevention and Recovery Center (PARC) for planning, carrying out and evaluating activities to prevent and treat substance abuse, according to the auditor’s office.

The grant required PARC to submit a collaboration report and an intravenous drug-users report within 60 days of the end of the fiscal year.

“We felt having cross-trained or multiple people in the process would fix the problem,” he said.

Santistevan pointed out the reports weren’t finished yet, and other issues could come up between now and when the final reports were issued.

Commissioner Richard Stevens said sometimes when there is a change and things can fall through the cracks, adding having multiple people able to accomplish a task is a good idea.

Santistevan pointed out the county didn’t have any findings in the accountability audit. The audit measures whether the county followed the law.

“Last year we had a finding in the accountability audit,” he said. “This year, the accountability audit … it was very clean.”

Originally published March 3, 2010