Logan County Board hears favorable
Send a link to a friend
[April 27, 2017]
- On Thursday, April 13, 2017, when the Logan County Board
held its monthly Workshop one featured topic was the recently
returned audit for 2015/2016; and its single audit report on the
internal control over financial reporting and compliance related to
Government Auditing Standards.
Adam Pulley of Clifton, Larson, and Allen, the company that
conducted the audits, briefly shared the audit results with the
board. He handed out a packet that showed the analysis of the
financial statements and gave a brief overview of the county's
Pulley said the packet included "a letter of governance on the
adjusting entries made to the audit," a "management letter with a
couple of points of recommendation," and a "single audit report
which was over the federal programs."
Pulley said once again his firm has "issued an unmodified audit
opinion on the financial statements. This basically means it is a
clean opinion. It's the best opinion we can give the county on the
financials. What you are looking at, you can feel good about. "
Pulley said the "single audit report over the federal grant
programs" also received an "unmodified or clean opinion." He said,
"There are five findings that we had [and] they are all repeats from
prior years. They are not uncommon findings."
Pulley said, "Three of them are specific to the financial
statements. These would be the fact that we help the county put
together the financial statements [and] because we are external
auditors and not a part of the internal control of the county, we
have to note that as a finding of the county themselves."
Pulley said, "The other two findings we had were over the federal
grant program specifically and these were both items that we had
noted last year. I don't know that I would consider them items
themselves. They are really just opportunities to strengthen
Pulley said, "Both of them are in the health departmen" and "we
discussed [them] with the health department." He said, "when it
comes to determining eligibility for the WIC program, not all of the
information was on the intake forms being signed-off on. We just
reminded the health department to tighten controls around that."
Pulley said, "In our testing of costs and salaries, we noted that
there was $16 that was overcharged to the grant program."
Pulley said, "We came across a couple of items in the county motor
fuel tax fund that should have been recorded differently in a prior
year. Because they were identified this year, we made prior period
adjustments to the statements in this fund so that the fund balance
was brought to where it should be."
Pulley said, the reported fund balance was "$3.4 million at the end
of last fiscal year" and "there was one adjustment for an
intergovernmental receivable." He said, "What had happened was, the
highway department received a receipt for $95,000 that they
deposited into the township motor fuel tax fund and it actually
belonged in the county motor fuel tax fund."
Pulley said, "The motor fuel tax fund should have been $95,000
higher than last year. It has been corrected in this year, so going
forward, the fund balance is accurate."
Pulley said, there was an $80,000 amount that showed up as deferred
because "in a prior year, we had received a receipt that at the time
we believed had some time restrictions" so it "could not be
recognized as revenue last year."
Pulley said, "Come to find out in discussions with the state, there
are no restrictions. Once the county received it last year, it was
okay to recognize as revenue, so that should have been recognized
revenue in the prior year." He said, "it was caught and it was
corrected this year."
Pulley said, as a result of these corrections, the county motor fuel
tax fund and the county as a whole are $76,000 or so higher in terms
of fund balance.
Pulley said, countywide "cash and cash equivalents" which include
ETSB "increased from $4.4 million at the end of last year to almost
$5 million at the end of this year."
Pulley said receivables for the county as a whole "went down a
little bit. We did see this at other counties we had audited as
well. Basically the state is a little more caught up than what they
were in prior years in terms of payments to the county, so the
county does not have as big of a receivable balance sitting out
there as of year end."
Pulley said, "Of the $5.6 million at year end, $4.1 [million] of
that is actually property tax receivables."
Pulley said the liability side with "notes, leases, and bonds went
down a little bit." It represents the county paying down its
existing debt on the long term debt.
[to top of second column]
Pulley said, other liabilities "jumped up a lot" and "largely
represents" many "pension changes and the recognition of how pension liabilities
get shown." He reminded the board liabilities had jumped last year for that
Pulley said, the reason it jumped this year is "there were a lot
of changes in the actuarial assumptions. Essentially, what IMRF thought they
were going to be making in terms of projected investments ended up being a lot
less, and so contributions that were made into the pension plan were not enough
to really cover that offset" He said, "the liability has increased," but does
not find it alarming. It will just need to be monitored.
Pulley said the equity of the county as a whole decreased from $18.2 million to
about $16.8 million. He said the "majority of that decrease" was connected to
the "pension liability" which "hit the county's net position as a whole."
Income statements showed a bit of a decrease. Pulley said income taxes decreased
from "$1.4 million in 2015 to $1.3 million in 2016," and said that amount was
similar to the level in 2014. Sales taxes also decreased a little bit from $1.9
million to $1.7 million.
Pulley said user charges, fees, fines, and other miscellaneous revenues
increased from $4.3 million to $4.56 million.
Pulley said for grants, both operating and capital decreased. He said grant
activity is going down at various municipalities and "in the county's case,
there were some donated vehicles from IDOT that were received last year" and
that "contributed to the decrease in grants."
Pulley said total expenditures for the county increased by "a little over a
million dollars" primarily due to the "pension liability" reflected in
Pulley said for governmental funds, balances increased from 2015 to 2016 going
from "$10.17 million to $10.21 million." He said the restatement of $176,000 in
adjustments are the "reason the fund balances went up" and the county actually
"experienced a bit of a decrease" in total fund balances of $133,000.
Pulley said the unassigned fund balance in the general fund decreased from "$1.7
million in 2015 to 1.5 million in 2016."
Pulley said the management letter made a few "recommendations" but were
considered "material weaknesses" or "deficiencies." They were just areas for
Pulley said he wanted to touch on credit cards because they are "a higher area
of risk." He said they tested for "support of purchases within the monthly
statement" and whether there were "controls in place with somebody reviewing
those credit card purchases."
Pulley said they found "purchases that did not have supporting documentation."
He said the recommendation is "to review who has the credit card" and look at
"the control processes in place to make sure somebody is reviewing those that is
not the same person initiating those purchases." Pulley said it would help
"mitigate any risks there."
Pulley said the letter to governance shows the audit adjustments. He said this
letter is "where we would note any significant disagreements with management and
any significant issues we came across during the audit. Happy to say that there
were none, so there is nothing to report there."
Pulley thanked Treasurer Vicki Dugan and other department heads for working hard
to help make the audit process "as smooth as possible."
Finance Committee Chairman David Hepler made a motion that the board accept the
Clifton, Larson, and Allen audit for 2016.
Board Chairman Chuck Ruben thanked Pulley and said Clifton, Larson, and Allen
has "been wonderful to work with over the years."
Guests included Adam Pulley, Steve Carone, and Lindsay Stamp of Clifton, Larson,
and Allen public accounting firm, and County Treasurer Vicki Dugan, and Penny
Thomas from the Treasurer's Office.
The board will vote on approval of the audit at Tuesday's Regular Board meeting.