We, the Saguache County Board of Commissioners, would like to address an article published in a San Luis Valley newspaper titled “Saguache County Audit Identifies Problems” dated November 2022.
Within the 2021 Audited Financial Statements, prepared by Wall, Smith and Bateman, Inc., items were identified as “Financial Statement Findings”. Below we will address these items for the public.
- “Treasurer fees were being charged to Social Services and on federal funds which is not in accordance with Colorado Revised Statues. (CRS 26-1-123 and CRS 30-1-102).” When the new automated accounting system was implemented, treasury fee rates were established and automatically charge when funds are received by the Treasurer. The Treasurer was aware that some rates were implemented incorrectly and was working with the system administrator to make appropriate corrections. A reconciliation was completed of treasury fees charged to Social Services with an appropriate refund made in 2022.
- “Grant Reimbursements did not reconcile to the County’s general ledger.” While all grant reimbursements do not match the general ledger, all grant reimbursements do reconcile to the general ledger with the difference being the indirect charge to the grant that is not charged/expensed on the general ledger. Certain grants allow for the County to bill additional funds (indirect) based on the payroll charges. All State and Federal grant billings are reviewed and must be accepted by State oversite before funds are received by the County. As of this writing no grant billings are in dispute.
- “Medicaid billing was not being completed accurately or timely.” The County was very aware that there was an issue with the Medicaid billing system in that it was not accepting entries made for billing. A contributing factor was that Medicaid did not initially accept the County’s certification and tax identification number. These issues have been remediated and Medicaid billings are current, however reimbursements are still outstanding but expected before yearend. As the County is committed to continue this program for our residence, a motion was made for our general fund to cover the shortfall in this program until funds are received.
- “Numerous correcting journal entries are posted by the Finance Department to the General Ledger. In some cases, documentation was not maintained.” This finding primarily relates to additional journal entries need to implement a new automated accounting system effective Jan. 1, 2021. Several errors were made when setting up prior balances and the cash accounts. A complete reconciliation of ledger balances was completed resulting in extra journal entries needed to make corrections. All accounts are currently balanced, and a policy has been implemented that all journal entries must be authorized by the Finance Specialist.
- “Landfill closure and post closure cost studies have not been completed in accordance with Colorado Department of Public Health and Environment (CDPHE) guidelines.” The Landfill closure and post closure cost are due to CDPHE every 5 years and was not due to be completed until 2022. The County did complete the study in 2022 therefore does not accept this finding as accurate.
- “Social Services and the Sales Tax Youth and Seniors Fund expenditures exceeded appropriations for the year ended December 31, 2021 by $5,150,047 and $19,034, respectively, this may be a violation of Colorado Revised Statutes 29-1-110.” The published article says we are in violation of State Statues, however, the 2021 Financial Statement Findings indicated this “may” be a violation. Regarding Social Services, CRS 26-1-122 states each county shall annually appropriate as provided by law such funds as shall be necessary to defray the county departments twenty percent share of the overall cost of providing the assistance payments, food stamps (except the value of food stamp coupons), and social services activities delivered in the county. The County only budgeted for its proportionate share of the costs with the difference in budgeted appropriations and those expenditures reflected in the Audited Financial Statements to be direct pass-through dollars provided via the food stamp coupons amounting to approximately $5,000,000. For the 2022 budget, a disclosure will be made for the value of the pass-through food stamp coupons. Regarding the Sales Tax fund, the additional appropriations were a correction of a prior period balance with these dollars being transferred to other sales tax funds within the County. Therefore, the County does not believe this balance correction is a violation of the Colorado Revised Statutes.
- All audit adjustments proposed by Wall, Smith and Bateman have been made to the County’s Dec. 31, 2021, financial statements to present them in accordance with general accepted accounting principles.
The County is aware that internal controls are not as robust as desired. An experienced Financial Specialist was hired in June 2021 to provide oversite of the financial reporting process. Several procedures have been implemented to provide timely and accurate reconciliations and financial reports, with monthly financial statements being presented to the Board of County Commissioners and all department heads. A policy and procedures manual has been implemented in the Public Health sector and a manual is in process for the County Administration sector. In addition, Social Services has also hired a full-time accounting person to provided timely and accurate reporting in this area.
It has always been the County’s goal to provide accurate accounting records and financial reports and be transparent to the County constituents in regards to County revenues and expenditures.
Commissioner Tom McCracken – District I
Commissioner Lynne Thompson – District II
Commissioner Tim Lovato – District III