The St. Francois County Commission recently received a preliminary 2015 audit report and there were only five findings this year compared to several more they had last year.
Lori Crump of Maloney, Wright & Robbins said the firm did the annual financial statement for St. Francois County for a period ending Dec. 31, 2015.
“We did issue an unqualified or unmodified opinion on the financial statements, which is an opinion rendered on the account balances,” said Crump. “We do look at internal controls and we review those to determine how much testing we are going to do on other account balances.”
Crump said they do issue an opinion on the single audit of the financial statements, which is the federal money that is received from the county. They also look at internal control structure of the financial statements and of the federal programs that are funded for the county.
“Looking at the internal control structure we report any significant deficiencies or material weaknesses that we find,” said Crump. “Those are reported within this report as well and I think we had five significant deficiencies this year which is a lower level issue of material weaknesses.”
Crump said county assets decreased about $136,000 compared to the prior year and the county paid off one of the certificates of participation, greatly reducing the liability balance for the year.
“Looking at income statement activities, which is expenditures and revenues, actual total expenses decreased by about a million dollars for the fiscal year 2015 and the general revenue increase by about $300,000,” said Crump. “Which includes different types of taxes, like sales tax, law enforcement sales tax and things like that.”
Crump said that the major funds reviewed were the general fund, road and bridge, law enforcement sales tax and debt service fund.
“We normally concentrate most of our audit procedures in those major funds because those are the bigger dollar fund balances,” said Crump. “Then we categorize all the smaller fund balances together and we do supplemental procedures on those accounts as well on those funds.”
Crump next went over the disclosure notices the firm is required to report for clients when completing an audit.
“The first disclosure notice are just general information that normally doesn’t change year to year,” said Crump. “Your general accounting policies of information on your reporting, on the financial statements, which you guys are modified cash basis.
“That means some of the liabilities are not recorded, for example, the pension plan under walkers in not reported in the financial statements, however it is disclosed within the notes where you can see what those liabilities are at the end of the year.”
Crump said she wanted to highlight the cash balances at the end of the year.
“You guys have a substantial cash balance, which includes operating cash accounts, demand deposit accounts, and certificates of deposit,” she said. “They were all fully collateralized by securities at the end of the year.”
Crump said the biggest change in 2015 compared to 2014 is the reporting of the pension liability.
“Again, we do not report that liability in the face of the financial statements, but we do report that in the notes,” said Crump. “There are 91 inactive employees, you have inactive employees who are entitled to, but not receiving retirement benefits at this point and there are 35 who are and your active employees who are paying in and contributing right now are 171. So you actually have 297 people in the lagers plan.”
Missouri Lagers is a retirement plan that municipalities, cities and political subdivisions pay into and all of the contributions are then invested in the market.
“So you are just a small piece of that logger plan, so those investments are the same and consistent across the board for every participant in that lagers plan for the year 2015,” said Crump. “That will change year to year depending on how lagers plan invests those monies in the market.”
Crump said for the county of St. Francois at the end of 2015, the general division actually had an asset in the lagers plan of civil liability.
“Which is a good thing because most people have a liability where they are trying to play catch up and invest more to compensate for those retirement benefits, ” said Crump. “The police division, same situation, the total pitch and liability is actually less than what your plan asset value is, that is over by about a million dollars. The general was over by about $100,000, so that is a pretty good financial division to be in with logger at this point in time.”
Crump repeated that, with the debt disclosures, the county paid off a 2005 certificate of participation with some refunding certificates they had in 2014. She said they disclosed the balances of that debt under note nine, what the current maturities are and what is due within the next current fiscal year.
“Compensated absences under note 10 and we address this from year-to-year and I think this seems to be decreasing slightly each year,” said Crump. “Compensated absences is what is due to an employee when they separate service, whether it would be comp time, vacation or sick leave and for the fiscal year 2015 that total was 1.2 million dollars.”
She said that, with the disclosure on fund balance, they have to break it down by designations of what the county has on hand at the end of the year.
“Basically it is going to be mainly made up of your cash balances at the end of 2015,” said Crump. “So this is broken down by fund whether it is restricted, committed or assigned for a specific purpose.”
Crump said they have to disclose any subsequential events to the Dec. 31, 2015 financial statement day and the county had a few things they had either transacted at the beginning of 2016 or planned to.
“One is the recovery zone, economic development lease certificates of participation that were approved for prepayment,” said Crump. “We have a construction bid for one of the bridges that will be under construction and a grant for the Bone Hole cleanup for $812,000 that is expected to be received in this current fiscal year.”
Crump said the federal award money that they look at, which is referred to as a single audit, is based on money that’s received from the federal government.
“It can be funneled through the state, so we have to account for all that federal money and determine which program that we are going to review based on several different factors,” said Crump. “Usually it’s the BRO program and again is year it was as well. It shows every federal dollar received or spent from St. Francois County in 2015. So you has $859,000 in federal money for the fiscal year.”
Crump said they really don’t look at dollars when they look at federal award programs — they look at compliance if the money was spent based on what it was awarded to go towards. She added they rendered an opinion that the county was in compliance with those grant award requirements.
County Auditor Bret Burgess said that when the county receives so much federal or state grant they get triggered in to a single audit category.
“Single audit, of course, is more work for the independent auditor and for us on the financial side,” said Burgess. “Grants are great and everyone thinks it’s free money, but the reality is nothing is considered free. I would just encourage we recognize it is more work and it a greater cost than what we sometimes see.
“I’m not saying grants aren’t the way to go, but it does place a greater burden particularly our office to make sure we are being compliant, watching those assets as they come in and watching those assets as they go out.”
Burgess stressed that — whether five years or 20 years down the road mm there have been instances in the past where they weren’t watched.
“So just know it does create a greater burden and I realize it’s a need at times, but I just wanted to make that point,” said Burgess.
Crump agreed with Burgess. She said her firm has seen in the last few years that third party agencies are communicating more, and in return, they are getting more feedback and correspondence from them.
“You really need someone overseeing all of the grants, almost like an internal auditor just for the single audit program,” said Crump. “To verify you guys are in compliance because it could prevent you from losing grants in the future.”
Renee Bronaugh is a reporter for the Daily Journal and can be reached at 573-518-3617 or email@example.com