By Dan Hust
MONTICELLO — July 10, 2007 — Legislators took a look at Sullivan County’s voluminous annual comprehensive financial report for 2006 on Thursday.
But they also got the chance to see something never before included with the report – a plan to fix the problems noted therein.
Overall, the county’s financial health is stable. Andrew Pavloff of the Monticello accounting firm Knack, Pavloff and Company told legislators that the county’s net assets increased by $2.5 million, although Sullivan spent $1.7 million more than it earned in 2006.
Statistics, however, weren’t the focus on Thursday. Pavloff spent much of his presentation speaking about changes in policies and procedures.
He noted the following:
• The county’s financial records did not include the liabilities for the Division of Public Works’ Maplewood facility.
Sullivan County Manager David Fanslau said that, by the end of this year, the Office of Management and Budget “will inform the County Attorney’s Office about the importance of informing the Office of Management and Budget and the Treasurer’s Office of all contracts and agreements that involve county finances.”
• The county did not file applications in a timely fashion to seek reimbursement for the construction of the Fire Training Center. The construction was substantially completed in 2005, and the applications for reimbursements were not filed until one year later.
Fanslau explained that grant functions are being centralized in the new Division of Community and Economic Development and will, in conjunction with the Division of Management and Budget, create an appropriate reimbursement policy and process by next year.
• Capital asset additions were not recorded at historical cost, and items disposed were not deleted from the depreciation schedules.
Fanslau said a fiscal administrative officer has been hired by the Audit Department to track assets, with the help of a software program that will be ready by 2008. (An in-house database will serve that duty in the meantime.)
• The transfer stations have only one employee each. Since there is no separation of duties, internal control is limited. Information is not always remitted to the accounting personnel in the landfill office in a timely fashion.
“Management has determined that the most sensible and cost-effective option to resolve this issue is to rotate the transfer station operators amongst the transfer stations,” said Fanslau – a process which is beginning now.
• Off-book accounts – bank accounts maintained by department heads rather than the county treasurer – are only recorded with the County Treasurer’s Office monthly or even annually, rather than by transaction.
Fanslau said the county is reviewing these accounts but has already recommended that the treasurer be given control of them by next year – a move County Treasurer Ira Cohen applauded.
“David has dealt with these very aggressively, and I appreciate that,” Cohen said.
• Pavloff found that the Department of Family Services had not properly recorded revenues received from federal and state sources. Settlement vouchers were improperly posted, which overstated some revenue accounts and understated others.
“The county is in the process of implementing a Revenue and Receivable policy,” said Fanslau. “… The policy will require fiscal administrative officers to review and approve all journal entries sent to and posted by the Treasurer’s Office. It also requires an in-depth review of all receivable and revenue accounts before the Treasurer’s Office closes the accounting books for the year.”
He added that the Department of Family Service’s current fiscal administrative officer has been replaced.
• The county required Pavloff and his colleagues to prepare the financial statements, which he said is usually done by management, not auditors.
Fanslau said this constitutes a new way of doing business for the county and will take steps to prepare the financial statements in-house or by an outside auditor for fiscal year 2007.