2009 Humphreys County Comptroller Report

7/28/2019 2009 Humphreys County Comptroller Report

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ANNUAL FINANCIAL REPORT

HUMPHREYS COUNTY, TENNESSEE

FOR THE YEAR ENDED JUNE 30, 2009


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OFFICE OF DIRECTOR OF SCHOOLS

FINDING 09.04 EXPENDITURES EXCEEDED APPROPRIATIONS

(Noncompliance Under Government Auditing Standards)

Expenditures exceeded appropriations approved by the County Commission in the Board of

Education ($8,987) major appropriation category (the legal level of control) of the General

Purpose School Fund. Section 5-9-401, Tennessee Code Annotated, states that All funds

from whatever source derived, including, but not limited to, taxes, county aid funds, federal

funds, and fines, that are to be used in the operation and respective programs of the various

departments, commissions, institutions, boards, offices, and agencies of county government

shall be appropriated to such use by the county legislative bodies. This deficiency exists

because management failed to hold spending to the limits authorized by the County

Commission, which resulted in unauthorized expenditures.

RECOMMENDATION

Expenditures should be held within appropriations approved by the County Commission.____________________________

OFFICE OF TRUSTEE

FINDING 09.05 BANK STATEMENTS WERE NOT ACCURATELY RECONCILED

WITH THE GENERAL LEDGER

(Internal Control Significant Deficiency Under Government AuditingStandards)

The bank statements for one of the trustees bank accounts were not accurately reconciled

with the general ledger account for April through June 2009. The trustee attempted to

reconcile the bank account monthly; however, the trustee did not identify all errors. In

addition, errors that were identified were not always corrected. Sound business practices

dictate that bank statements should be reconciled with general ledger accounts to ensure

errors are identified and corrected. The trustee advised us that the bank reconciliation

problems resulted from the bank netting transactions and not providing the supporting

documentation. Since errors were not identified and corrected, the bank account did not

reconcile with the general ledger account by $2,342 at June 30, 2009. As of

September 30, 2009, the trustee has not determined the proper adjustments to reconcile the

accounts.

RECOMMENDATION

Bank statements should be reconciled with the general ledger monthly, and any errors

discovered should be corrected promptly. The trustee should require her depository to

furnish adequate documentation necessary to reconcile the bank account with the general

ledger.


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FINDING 09.13 DUTIES WERE NOT SEGREGATED ADEQUATELY IN THE

OFFICES OF COUNTY EXECUTIVE, COUNTY CLERK,

CIRCUIT AND GENERAL SESSIONS COURTS CLERK, CLERK

AND MASTER, REGISTER, AND SHERIFF

(Internal Control Significant Deficiency Under Government

Auditing Standards)

Duties were not segregated adequately among the officials and employees in the Offices of

County Executive, County Clerk, Circuit and General Sessions Courts Clerk, Clerk and

Master, Register, and Sheriff. Officials and employees responsible for maintaining

accounting records were also involved in receipting, depositing, and/or disbursing funds.

Accounting standards provide that internal controls be designed to provide reasonable

assurance of the reliability in financial reporting and of the effectiveness and efficiency of

operations. This lack of segregation of duties is the result of managements decisions based

on the availability of financial resources and is a significant deficiency in internal controls

that increases the risk of unauthorized transactions. Also, this deficiency is the result of

managements failure to correct the finding noted in the prior-year audit report.

RECOMMENDATION

Officials should segregate duties to the extent possible using available resources.

MANAGEMENTS RESPONSE REGISTER

The Office of Register of Deeds has two employees other than the register. Given that fact,

our duties are as segregated as possible. Each of us is trained in carrying out the regular

business of our office in the event that one employee is absent. On a regular day, when all

employees are present, the following are the normal procedures. The register checks

documents as they are delivered to verify that they are recordable and checks to see that

the amount of money paid in taxes and recording fees is appropriate. Both deputies writereceipts and record documents. Toward the end of the day, the chief deputy register

prepares and posts the deposit. The deputy hand delivers the daily receipted monies to the

bank. The register verifies the deposit receipt from the bank, the deposit listing and receipt

register, and posts the amount deposited into the checkbook. The register reconciles the

bank statements and prepares tax reports and writes checks to the state and county for

taxes and fees collected during the month. The register normally writes any other checks.

AUDITORS REBUTTAL

We recognize that the steps you describe above are good first-steps toward implementing a

sound segregation of duties process; however, additional steps should be considered tocomplete the process. It is possible to have reasonable segregation of duties with a

three-person office if certain divisions of responsibility are instituted to mitigate any

weaknesses in internal control.


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Documents

2009 Humphreys County Comptroller Report