Lazaro Aleman
ECB Publishing, Inc.
A problem is apparently bedeviling the county’s purchasing and accounts payable system, one that came to light because of complaints from vendors who have not been paid timely, sparking a lively discussion at a recent board meeting.
The problem of vendors not being paid timely came up at the Jefferson County Commission meeting on Thursday evening, Aug. 3, an outgrowth of a discussion on which employees in the Clerk of Court Office should be given check-signing authority on bank accounts.
Underlying the discussion – or the elephant in the room being tiptoed around, as it were – is the longstanding tension between the Clerk of Court Office and some members of the Board of County Commissioners, arising in large part from the financial abuses underscored by last year’s forensic audit.
County Manager Shannon Metty initiated the discussion, telling the commissioners that she was seeking check-signing authority for two employees in the Clerk of Court Office because the individual who had previously been assigned the responsibility had left the county’s employment.
Obviously, Metty said, the commission chair, vice chair and clerk should have check-signing authority, as they were listed on the accounts.
“But as far as others having signing authority, the clerk’s office has asked for Crystal Burns and Sherry Sears to be added to the list,” Metty said. “I want to get consensus from the board that everybody is okay with both these employees being added to the account.”
She also asked that access to the accounts be granted to herself and Budget
Officer Gus Rojas as part of the two’s responsibilities of monitoring all accounts.
The board members had no problem with granting Metty and Rojas the requested access for monitoring purposes. But a question arose as to why the clerk wanted two employees to have check-signing authority when one had sufficed previously.
Metty explained that the office had added a person to do payroll, so that now one did the board of commissioners’ payroll and another the clerk office’s payroll. The authorization, she said, would be for only the payroll account. As such, she recommended approval, she said.
“I don’t see any issue with the payroll account,” Metty said. “But as far as the rest of the accounts, who do you guys want to see there, other than the chair, vice chair and clerk?”
County Attorney Heather Encinosa failed to see the reason for the clerk’s request.
“Generally, the chairman and clerk would sign checks,” Encinosa said. “That’s my understanding of what your current process is. So, I’m not sure what account the clerk is requesting to have two additional people added. The payroll makes sense. Payroll is done electronically, typically by transfer. But as far as check-signing authority, I would think that it would be limited to the chair, the vice chair in the chair’s absence, and the clerk.”
Commissioner Stephen Walker agreed.
“I’m glad you brought that up, because one of the things that we got dinged on in the audit was because of having a lot of people being able to do that kind of stuff,” Walker said, a reference to the cited abuses in the audit. “That’s why we took away the rubber stamps.”
Encinosa said it might be appropriate for the board to reiterate the policy more formally that rubber stamps were no longer permitted and that every check required the dual signatures of the chair and clerk, or vice chair and clerk in the chair’s absence.
Fire Rescue Chief Derrick Burrus, however, expressed frustration with aspects of the new system implemented to remedy the past problems.
“I don’t want to get out of turn,” Burrus said. “But by putting more people on the bank account what you’re doing is you’re not hamstringing yourself when someone’s out, because the signature is access. It’s how it works.”
His point, he said, was that the more limited the number of people authorized to access the accounts, the more difficult it became to conduct county business if the key individuals were out for any reason, as access then was unavailable for all practical purposes.
Here the check-signing and vendor problem discussions became commingled.
“It’s his (Reams’) request,” Burrus said. “It’s his office, and I appreciate all the hoops we’ve jumped in the last year to try and solve the crisis that we had, but what have we discovered? We have hamstrunged ourselves, we’ve bottlenecked our vendors, and our checks are not getting out the way they should.”
“We need to go back to the old way is really what we need to do,” he continued. “You don’t want to have a rubber stamp, I get it. Get a signature. But let’s process our bills when they come in, get them signed, and get them out. We have bottlenecked payments to vendors.”
He cited an overdue Comcast bill that caused the fire station’s Internet service to be cut off, conceding upon questioning that he didn’t know whom to point the finger at for causing the delay.
“But right now, the checks are going around the stream to get where they need to go,” Burrus said. “Let’s go back to the old way. You don’t want to rubberstamp it, fine. But once, as an agent of this county, I obligate this county to something, you’ve got to pay it anyway. You can fire me if you want to, but you’ve still got to pay the bill.”
Commission Chairman Chris Tuten made the point that if checks weren’t getting to vendors on time, it wasn’t because the checks weren’t being timely signed.
“I sign checks every Thursday that we have a meeting and they’re still not getting to the vendors,” Tuten said. “Whether it’s the mail or they’re being put in the mail late, it’s not because we have limited signatures on the bank account, I can assure you. That’s not the problem.”
Understood, Burrus said.
“But the original issue I came here to talk about was that the clerk asked to have two people in his office on that account plus himself,” he said. “He’s trying to get stuff done. I just think that we ought to do what he wants us to do as far as that goes, to give his people access to pay our bills or check our accounts.”
Walker asked Metty to get up a list of all the vendors who had complained about not being paid on time to see if the cause of the problem could be identified.
“We need to track where the problem is,” Walker said. “I don’t think that adding more people to the signature list is going to solve the problem.”
Burrus, however, continued to argue for a return to the old method.
“What I’m asking you is if we can go back to sending our bills to the clerk,” Burrus said. “Go ahead and make out the check, bring it up here for a signature when the meeting comes along. And then, once the invoice is paid, give it to the county manager and budget officer, and if they find something in there that shouldn’t have been purchased or paid, then they can come back to me and say, ‘why did you do this?’”
Walker, for one, wasn’t persuaded.
“I think it needs to be approved the way we’ve got it now,” he said. “That’s a horrible way to do things, paying bills and then seeing if you should have paid them or not.”
“You have to pay the bill anyway, commissioner,” Burrus said. “Once I’ve obligated you, you’re obligated to pay.”
“I understand that,” Walker said. “But I think the correct process is to send it to the manager, and once it’s approved, it goes to the clerk’s office to get paid. Instead of going to the clerk’s office and getting paid and then coming back to us. To solve the problem, we need to find out what the problem is, instead of just going back to the old way, because none of us were comfortable with the way that things were.”
“But we’ve created a system to solve a problem that didn’t exist,” Burrus said. “What problem have we discovered with this new solution? There have been some things that have been uncovered, I get it. But has it been a department head? It has just created extra work for us.”
“The old way worked,” he continued. “I know you didn’t like the stamp system, but you got a voucher that said this is what got paid. If you found something on that line, and I know our former administrator wasn’t doing that, you could have your manager or budget officer look at the list and say, why did this get paid? What is this? The questions are there. But bills got paid, it made vendors happy, and department heads weren’t jumping through hoops and doing backflips. Then you complicated the process. And you know whose job it is now, it’s the department heads. It’s added an hour of work to every cycle of the bill…and the more that you take away from the department heads, the less it feels like we’re department heads.”
The discussion prompted Cyndy Pyburn, a retired banker and auditor, to comment on the issue.
“With all due respect to the difficulties that this gentleman is having,” Pyburn said, referring to Burrus, “you must have dual control, and it’s fairly easily achieved as a process if you set your mind to it. Bear in mind, I don’t have the advantage of knowing how things work here internally, but in addition to having dual controls and a payment process that works seamlessly, you need a monthly operating statement where you can see all the expenses of the county and get approval of them.”
Pyburn took issue with Burrus saying that once a department head obligated the county, the payment had to be made.
“It does,” she said, “but I don’t think that you can allow that fact to cause you to let there be a breakdown in acceptable controls. That’s just the experience of one person who has banking and auditing experience in a highly regulated environment.”
Last to speak was Nikki Salls, the accounts payable clerk in the clerk’s office who processes the checks for payment. Salls explained that the current process consists of bills being sent first to the department heads for verification and coding and then the county manager for further verification.
“Once I get a bill returned with a signature on it, because I am not allowed to cut a check for a bill without a signature, it gets done,” Salls said. “Sometimes there are breakdowns in my area, and if I make a mistake I go after it wholeheartedly and say, hey, I forgot to do this, and I get it done. There are also mistakes in other areas, and we generally try to work it out. But I will not have it go down that I am purposely paying bills late.”
She told commissioners that if any of them wanted answers to specific questions or to learn how the process worked generally, she was more than glad to show them.
“I’m sorry that we’re getting calls from vendors,” she said, “but I can highly, highly, expand on the fact that it’s not because we’re choosing to pay things late or because we’re letting things sit. By the time you get the checks for signatures, there is nothing left on my desk from whatever was sent in the past two weeks, because I make sure that everything goes in. I just want to set that straight.”
Metty conceded the existence of a problem.
“It’s something that we’re working on, because we recognize it’s a problem and we have some ideas,” she said. “But it’s not something that we’ve found a solution to just yet. We’re working on it though.”