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STATE BOARD OF ACCOUNTS 302 West Washington Street Room E418 INDIANAPOLIS, INDIANA 46204-2769 SUPPLEMENTAL COMPLIANCE REPORT OF ALLEN COUNTY, INDIANA January 1, 2015 to December 31, 2015 B47079 FILED 10/26/2016 ---PAGE BREAK--- ---PAGE BREAK--- TABLE OF CONTENTS Description Page Schedule of Officials 2 Transmittal Letter 3 County Adult Probation Department: Audit Result and Comment: Condition of Records 6 Official 7 Exit Conference 8 County Juvenile Probation Department: Audit Result and Comment: Condition of Records 10 Exit Conference 11 ---PAGE BREAK--- SCHEDULE OF OFFICIALS Office Official Term County Auditor Tera K. Klutz 01-01-15 to 12-31-18 County Treasurer Susan L. Orth 01-01-13 to 12-31-16 Clerk of the Circuit Court Lisbeth A. Borgmann 01-01-15 to 12-31-18 County Sheriff David J. Gladieux 01-01-15 to 12-31-18 County Recorder Anita A. Mather 01-01-15 to 12-31-18 County Prosecuting Attorney Karen E. Richards 01-01-15 to 12-31-18 Circuit Court Judge Honorable Thomas J. Felts 01-01-15 to 12-31-20 President of the Board of County Commissioners F. Nelson Peters 01-01-15 to 12-31-16 President of the County Council Thomas A. Harris 01-01-15 to 12-31-15 Roy A. Buskirk 01-01-16 to 12-31-16 ---PAGE BREAK--- STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa TO: THE OFFICIALS OF ALLEN COUNTY, INDIANA This report is supplemental to our audit report of Allen County (County), for the period from January 1, 2015 to December 31, 2015. It has been provided as a separate report so that the reader may easily identify any Audit Results and Comments that pertain to the County. It should be read in conjunction with our Financial Statement Report and Federal Single Audit Report of the County, which provides our opinions on the County's financial statement and federal program compliance. This report may be found at www.in.gov/sboa/. As authorized under Indiana Code 5-11-1, we performed procedures to determine compliance with applicable Indiana laws and uniform compliance guidelines established by the Indiana State Board of Accounts. The Audit Results and Comments contained herein describe the identified reportable instances of noncompliance found as a result of these procedures. Our tests were not designed to identify all instances of noncompliance; therefore, noncompliance may exist that is unidentified. Any Official Response to the Audit Results and Comments, incorporated within this report, was not verified for accuracy. Paul D. Joyce, CPA State Examiner August 25, 2016 ---PAGE BREAK--- (This page intentionally left blank.) ---PAGE BREAK--- COUNTY ADULT PROBATION DEPARTMENT ALLEN COUNTY ---PAGE BREAK--- COUNTY ADULT PROBATION DEPARTMENT ALLEN COUNTY AUDIT RESULT AND COMMENT CONDITION OF RECORDS The Adult Probation Department did not have adequate controls in place to properly account for the transactions and account balances of the department. The following deficiencies relating to the record keeping were noted: 1. Depository reconciliations of the Adult Probation ledger balance to the bank account balance were conducted; however, the reconciliations contained incorrect outstanding checklists. In June 2016, as part of our audit, we performed bank reconcilement for December 31, 2015. The difference between the adjusted bank balance and the Adult Probation Ledger indicated cash necessary to balance in the amount of $398.75 at December 31, 2015. 2. Records presented for audit indicate that the Adult Probation Ledger was not properly posted. At December 31, 2015, the following variances were noted: Indiana Code 5-13-6-1(e) states: "All local investment officers shall reconcile at least the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories." Controls over the receipting, disbursing, recording, and accounting for the financial activities are necessary to avoid substantial risk of invalid transactions, inaccurate records and financial statements and incorrect decision making. (Accounting and Uniform Compliance Guidelines Manual for Counties, Chapter 1) At all times, the manual and/or computerized records, subsidiary ledgers, control ledger, and reconciled bank balance should agree. If the reconciled bank balance is less than the subsidiary or control ledgers, then the responsible official or employee may be held personally responsible for the amount needed to balance the fund. (Accounting and Uniform Compliance Guidelines Manual for Counties, Chapter 1) Amount (7,481) $ Probation User and Other Fees 37,537 Restitution 30,056 Adult Probation Ledger 37,537 Restitution Payable Accounts Register 2,235 December 31, 2015 Probation User and other Fees 39,772 Calculated Balance (9,716) $ Variance between Adult Probation Ledger and Calculated Receipts on Hand ---PAGE BREAK--- ---PAGE BREAK--- COUNTY ADULT PROBATION DEPARTMENT ALLEN COUNTY EXIT CONFERENCE The contents of this report were discussed on August 18, 2016, with Eric Zimmerman, Director of Court Services/Chief Probation Officer, and Sandra Egts, Executive Secretary. The contents of this report were discussed on August 25, 2016, with F. Nelson Peters, President of the Board of County Commissioners; Therese Brown, County Commissioner; and Larry Brown, Vice President of the County Council. ---PAGE BREAK--- COUNTY JUVENILE PROBATION DEPARTMENT ALLEN COUNTY ---PAGE BREAK--- -10- COUNTY JUVENILE PROBATION DEPARTMENT ALLEN COUNTY AUDIT RESULT AND COMMENT CONDITION OF RECORDS The Juvenile Probation Department did not have adequate controls in place to properly account for the transactions and account balances of the department. The following deficiencies relating to the record keeping were noted: 1. Depository reconciliations of the fund balance to the bank account balance were conducted; however, the reconciliations contained the following errors. a. The December 31, 2015 depository reconciliation listed two deposits in transit of $592 and $85 dated February 28, 2015, and November 30, 2015. b. The December 31, 2015 outstanding checklist was not complete. 2. Records presented for audit included two different attempts at the bank reconciliations using two different systems for the same time period. In June 2016, as part of our audit, we performed a bank reconcilement for December 31, 2015. 3. The December 31, 2015 bank reconcilement was completed by the Indiana State Board of Accounts in June 2016. The bank reconciliation indicated that the bank balance was higher than the book balance in the amount of $5,708. 4. A detailed listing of restitution on hand at December 31, 2015, was not available for audit. Indiana Code 5-13-6-1(e) states: "All local investment officers shall reconcile at least the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories." Controls over the receipting, disbursing, recording, and accounting for the financial activities are nec- essary to avoid substantial risk of invalid transactions, inaccurate records and financial statements and incor- rect decision making. (Accounting and Uniform Compliance Guidelines Manual for Counties, Chapter 1) At all times, the manual and/or computerized records, subsidiary ledgers, control ledger, and recon- ciled bank balance should agree. If the reconciled bank balance is less than the subsidiary or control ledgers, then the responsible official or employee may be held personally responsible for the amount needed to bal- ance the fund. (Accounting and Uniform Compliance Guidelines Manual for Counties, Chapter 1) Indiana Code 5-15-6-3(f), concerning destruction of public records, states in part: "Original records may be disposed of only with the approval of the commission according to guidelines established by the commission." ---PAGE BREAK--- -11- COUNTY JUVENILE PROBATION DEPARTMENT ALLEN COUNTY EXIT CONFERENCE The contents of this report were discussed on August 22, 2016, with Jamie Mann, Chief Probation Officer/Superintendent; Wendy Kyler, Budget Analyst; and Chandra Reichert, Personnel Manager. The contents of this report were discussed on August 25, 2016, with F. Nelson Peters, President of the Board of County Commissioners; Therese Brown, County Commissioner; and Larry Brown, Vice President of the County Council.