County is asked to explain uncorrected audit deficiencies

Lazaro Aleman
ECB Publishing, Inc.

A joint legislative committee charged with maintaining oversight of government operations in Florida is asking county officials to explain reported audit deficiencies that have gone uncorrected for several years.
The letter from the Joint Legislative Auditing Committee (JLAC) to the Jefferson County Commission, dated July 7, informs the board that when a county fails to correct audit findings that have been reported in three successive audit reports, the committee may require that the county provide a written explanation of what corrective action has been taken or is being taken.
“For each audit finding that was reported in the FY 2020-21 audit report and also in the two preceding audit reports, the response should either explain why full corrective action has not been taken or, if the governing body intends to take full corrective action, describe the corrective action to be taken and when it will occur,” the letter states.
The committee notes that relative to the grant accounting finding identified as 2015-001 on the audit, some transactions were recorded on a cash basis instead of the accrual basis of accounting.
“As a result,” the letter states, “adjustments were necessary to properly match revenues with expenditures.” It further states, “Certain receivables, deferrals, and payables were not recorded on a timely basis.”
In order to correct the finding, the letter underscores the auditors’ recommendations that: (1) “accrual basis accounting be followed to accurately record grant revenues and expenditures in the proper period, and that account balances be reviewed for proper cutoff and correct period of recognition, including grant receivables, accounts payable, and deferred income;” and (2), that the county seek assistance from an accounting professional to work with the existing staff and provide accounting guidance and oversight.”
The second finding, identified as 2018-001 on the audit, referred to the county’s budget not being prepared on a basis consistent with how financial statements are prepared and did not include budgets for the constitutional officers that were consistent with their actual results.
States the letter, “The board’s final adopted budget does not contain sufficient detail at the fund level and fails to account for significant amounts of lease purchases made. In addition, capital outlay and debt payments are not budgeted correctly, and several funds are not budgeted at all. Also, the county does not have a detailed budget of consistent detail to make a budget versus actual computation for each fund, and overspent the current fiscal year budget in several funds.”
It notes that the auditors recommended that the county adopt a budget in sufficient detail to include all actual funds being used to record transactions, including all constitutional officers.
“The auditors further recommend that the budget be entered into the accounting system to enable the board to monitor actual versus budget comparisons on a monthly basis,” the letter states, giving the county until Aug. 18 to respond.
The matter of the JLAC letter arose at the Jefferson County Commission meeting on Thursday evening, July 20, when Clerk of Court Kirk Reams referenced it, saying that he, County Manager Shannon Metty, Budget Officer Gus Rojas, and Clerk of Court Finance Director Charles Culp had discussed the situation at the group’s most recent weekly meeting.
“The first finding from 2015-001, as of the audit that’s being done right now, is coming off,” Reams said. “And we feel like the one from 2018 will be coming off next year. I had a talk with our auditor about that and we feel like that one will come off in the next audit.”
He asked that he and Metty be allowed to write a joint letter to the JLAC reflecting the latter two facts.
Metty agreed that the group had been working on the issue. She had also, she said, contacted Julian Dozier, the CPA who conducted last year’s forensic audit, to make sure that everything was copacetic.
“He seemed optimistic that now that we’ve got the budget officer, it helps with some of the internal control issues that they (auditors) were concerned about, as well you guys adopting the county manager ordinance,” Metty said. “He felt that both of these helped in resolving the issues.”
Commission Chairman Chris Tuten acknowledged having received the JLAC letter and referring it to the local committee for corrective action.
“Because, if it doesn’t get fixed, we lose our state funding,” Tuten said. “We lose our state funding, and the county doesn’t operate. So, it’s most important that this thing gets taken care of and we’re handling it.”
Established by the Florida Legislature, the JLAC is made up of between five and seven appointed members from each the Senate and House. The committee’s general responsibilities are said to be broad and affect all areas of governments in the state. The responsibilities are designed, per the JLAC webpage, to provide continuous oversight of government operations, in part through the auditing and review activities of the auditor general and the Office of Program Policy Analysis and Government Accountability (OPPAGA).
The committee may direct the Auditor General or OPPAGA to conduct an audit, review, or examination of any entity or record, including those of state agencies, counties, municipalities, special districts, district school boards, charter schools, and numerous other government organizations. As well as nongovernmental agencies, corporations, and persons that have received any appropriation made by the Legislature.
If the committee ultimately is not satisfied with an entity's effort to correct the cited audit findings, it may proceed with actions that include the withholding of selected state funding and initiating legal action to compel compliance.