County’s audit problems persist

With the county’s books being independently reviewed by state auditors for the first time since 2003, several errors have been spotted. One of those errors includes $382,000 the county has in local banks but does not have marked on its balance sheet.

"All this information is put in by different departments for the finance department," said Commissioner Pat O’Neill. "Did finance know about this before Bob?"

Finance Director Bev Divine said she informed Treasurer Bob Lothspeich of the unaccounted funds during the preparation of the 2007 financial statement.

Lothspeich said he first realized county accounts were out of line when they received notice of an overdraft on a warrant cashed at Bank of America.

"Bottom line is the cash in the treasury does not reconcile with our outside accounts," said Commissioner Greg Partch.

Partch called a meeting with county officials after receiving an e-mail about the errors in the 2008 financial statement from state auditor Debbie Pennick last Wednesday, May 5.

Lothspeich said his office is occasionally not alerted when payments are issued from the many taxing districts for which the treasurer administers funds.

His staff since that overdraft has developed a manual check to verify warrants approved by the county auditor’s office.

Divine said she told Lothspeich of a program in the county’s accounting software that would reconcile warrants with the county’s cash on hand as soon as payments are authorized.

Lothspeich verified that, but said nobody ever trained his employees how to use that program.

He said his staff will audit every transaction they can find for the past several years to find the problem once they are finished processing tax payments. He added the last reliable information on the county’s cash standing would be from 2002, the last time Whitman County’s financial statement was independently audited.

The 2008 statement was turned over to the state last October, after the county was granted extensions after missing the due date from last May.

In April, the county was alerted of errors in the statement.

State auditors said the finance department had made "significant changes" to the statement after hearing of those errors. Those changes were made, she said, without consulting audit staff and without supporting documentation.

Pennick said the corrections made by the finance department to some of the errors would force them to repeat more than 150 hours of financial review.

Commissioners instructed them to proceed with their review the county’s books, disregarding changes made during April.

Pennick advised finance officials to make sure they input final and correct information, with full documentation, before sending them back the statement.

"This has got to be the end gate of where we are on 2008," said Pennick.

The county has also wrapped up its 2009 financial statement. An audit of those books is expected to begin as soon as next month.