Bank statements show county six figures short on financial statement

Whitman County officials are looking to write hundreds of thousands of dollars off the county’s books at the end of this year to force a balanced ledger.

In dispute, is just how high that number needs to be.

Esther Wilson, county system administrator, reported Monday the county’s hired accounting consultant found actual bank statements showed the county has $426,670 less than what was booked on the county’s current expense funds.

Since sacking the county’s finance department in June, county commissioners have hired Elias Siriani, an accountant with the Spokane firm of Anderson Peretti.

Siriani was tasked with reconciling bank records with the county’s books. Those efforts came up with the finding that county holdings in its bank accounts are $426,670 less than what the county has carried on its books.

The plan announced by Commissioner Greg Partch Monday is to write that $426,670 off the books.

“We knew somewhere along the line we’d have to write this off,” said Partch.

Treasurer Robert Lothspeich, though, said Siriani Wednesday morning told him the ledger was closer to $200,000 out of balance.

“I don’t know how you could write off anything that’s this much in flux,” he said. “I’m not sure why that number was put out, but this is an election year for some people.”

In either case, Siriani’s finding is a reversal of the state’s June audit report on the county’s 2008 financial statement. The audit found nearly $582,000 invested in banks but not on the county’s ledger.

Nobody in the county seems to have a when or a why for the investment records going off track.

Cash from county accounts is invested by the treasurer’s office. Lothspeich said those investments were supposed to be recorded by the former finance department, but reviews found not all transactions were logged.

Lothspeich said Wednesday was the first he had met with Siriani about the discrepancy.

He added auditors, in addition to the investments in the current expense fund, also found investments reported on bank statements but not on the county’s ledger.

Partch noted previous audit reports from the state had noted a discrepancy between bank statements and county records.

“We’ve known we’ve had this problem for a lot of years, a number of years,” said Partch. “But we’ve finally gotten to the point where we have to do this, where we have to have good numbers.”

He said more resources have been put into fixing the problem to make sure the county’s books are balanced for the transition to the New World accounting software.

The county purchased the New World system in 2005 for $331,600. Officials have since paid the Michigan company $399,622 for software updates and training, though it has never been put into use.

It is expected to come online next February.

Commissioner Michael Largent said the $426,670 will be deducted from the county’s cash account. The account receives unspent funds left when county departments conclude a budge year.

The county’s August financial report, presented by Esther Wilson, the county’s systems administrator, showed $2,152,651 in cash on hand. Wilson, who was assigned a job in the county’s information technology department earlier this year, has been working as the county’s finance specialist since the dissolution of the finance department where she was formerly employed.

Wilson Monday also noted several other accounts in the county were also off balance, but to a much smaller degree than the current expense account.

The county’s cash standing typically dips in August, as expenses flow out before second half property tax payments come in. A chart of the annual monthly cash balance shows September as the perennial low point. Second half property taxes typically arrive in October prior to the Oct. 31 deadline.

The county ended 2009 with $2,175,221 in cash, down from the $2,796,181 balance to end 2008.

Primary factor for the drop was a $1,119,029 transfer to a restricted reserve account created by commissioners in 2007. The reserve money can only be used by official action from commissioners.

For most of 2010 cash balance has outpaced 2009.

Partch also added the county needs a solid picture of its cash standing for use in negotiations with union employees on collective bargaining agreements.

Courthouse, Solid Waste and Road department employees have been working all year without a contract. Jail officers signed a union contract earlier this month.