Correction: In this Oct. 10 guest commentary by Madera County Auditor/Controller Marcia Hall, some verbiage was inadvertently left out of the piece. The complete sentences are reprinted here for clarification.
"These annual financial statements are considered delinquent on the 31st of March, following the county's June 20 fiscal year end."
"The auditor controller's office does perform internal audit functions. Recently we investigated cash handling procedures in more than one department and are currently dealing with the misappropriation of funds (approximately $80,000) in one of our larger departments and have also informed the board of supervisors of apparent misspending by an outside contractor connected to a special district."
We apologize for any confusion the misprint may have caused.
After reading the Oct. 1 guest commentary by Todd Miller, I wanted to set the record straight as his commentary contained some errors and a few misstatements. However, I will agree that the auditor-controller's department needs to be the county watchdog and we are working to reestablish that moniker.
The annual audit is prepared by an independent accounting firm (not the county auditor).
These annual financial statements are considered delinquent on the 31st county's June 30 fiscal year end. Contrary to the information provided in last week's commentary, this department is currently working on the June 30, 2012 audit. The June 30, 2011 audit is already complete and was not two and a half years late.
Unfortunately, the audits for Madera County have been delinquent for every fiscal year since June 30, 2006. When I was appointed in January 2012, no work had been done on the audit and there was not one full-time employee on staff in the auditor-controller's department who had ever assisted with the preparation of the audit. Fortunately, we have filled some vacant positions in our department and are working diligently to complete the June 30, 2012 audited financial statements.
Has the county lost funding due to these delinquent audits? The county has certainly missed the opportunity to apply for some grants however, there is no guarantee that we would have been awarded funding from these grants. Many counties apply, not all are selected for funding.
The funding cycle for Community Development Block Grants (CDBG) has been missed. These funds are used to loan money to citizens to rehabilitate their houses. Currently we have in excess of $5 million recorded on our books, which are the outstanding loans under these CDBG related programs. Once repaid, these funds are loaned again for more rehabilitation projects.
Was cash out of balance by around $500,000? According to the audits prepared for the fiscal years ending June 30, 2008 through 2011, the auditor-controller's office has been unable to reconcile the cash balance recorded on the county financials to the cash balance provided by the county's treasurer. During our review of this process we discovered that a department made over $100,000 in "negative" non-cash deposits. We are currently working on cleaning up the reconciliation processes to provide more accountability regarding daily deposits and to properly account for investment transactions.
The audit adjustments noted in the guest commentary were not findings they were adjustments that the auditor made to the financial statements. Some of these adjustments were a result of the audit and some were reclassifications due to reporting changes required by Government Auditing Standards. To facilitate the completion of the audit, Gallina LLP, our outside auditor, posted the adjustments for us. They are required by professional standards to report the adjustments they made to our financial statements.
When I was appointed to this office, there were a lot of internal controls that needed to be shored up. Like the most recent Rim Fire, we are working very hard to control the perimeters while doing this sometimes the fire rages and there are casualties such as delayed funding. However, I am confident that we are on the right track. We have already improved internal controls and standardized procedures throughout the county and will continue to make changes and improvements to ensure accountability.
The auditor-controller's office does perform internal audit functions. Recently we investigated cash handling procedures in more than one department and are currently dealing with the misappropriation of funds (approximately $80,000) in one of our larger departments and have of March, following the also informed the Board of Supervisors of apparent misspending by an outside contractor connected to a special district.
Thirty years working as a governmental auditor has provided me the road map to make major changes to, not only my own office, but other departments in the county. Encouragement for these changes comes directly from the board of supervisors. They are well aware of the changes that I have made and have supported and encouraged me to keep up the good work.
They know that I will continue to be the financial watchdog for this county and they know my vision for the future of this office that is why they appointed me. I hope the readers will understand this as well.
If you meet me, you will quickly realize my commitment to improve the office of Auditor-Controller. Anyone can contact me if you would like to discuss the changes/improvements that we have already made and our vision for the future. firstname.lastname@example.org.