STATE OF MISSISSIPPI STEVEN A. PATTERSON State Auditor WILLIAM S. JONES, CPA Director, Department of Audit ED P. YARBOROUGH, CPA Director, Division of County Audits _part4 pptx

27 JEFFERSON DAVIS COUNTY SPECIAL REPORTS 28 JEFFERSON DAVIS COUNTY (This page left blank intentionally) OFFICE OF THE STATE AUDITOR STEVEN A. PATTERSON AUDITOR 3750 I-55 NORTH FRONTAGE ROAD JACKSON, MISSISSIPPI 39211 (601) 364-2888 FAX (601) 364-2828 29 INDEPENDENT AUDITOR'S REPORT ON THE INTERNAL CONTROL STRUCTURE BASED ON AN AUDIT OF THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS April 15, 1996 Members of the Board of Supervisors Jefferson Davis County, Mississippi We have audited the primary government financial statements of Jefferson Davis County, Mississippi, as of and for the year ended September 30, 1995, and have issued our report thereon dated April 15, 1996. The Independent Auditor's Report on the primary government financial statements is qualified because the primary government financial statements do not include the financial data of component units, which should be included in order to conform with generally accepted accounting principles. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the primary government financial statements are free of material misstatement. The management of Jefferson Davis County, Mississippi, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of primary government financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the primary government financial statements of Jefferson Davis County, Mississippi, for the year ended September 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the primary government financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the county's ability to record, process, summarize and report financial data consistent with the assertions of management in the primary government financial statements. The reportable condition noted during our consideration of the internal control structure is described in the accompanying "Schedule of Auditor's Findings and Recommendations." 30 A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the primary government financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we do not believe the reportable condition described in the accompanying "Schedule of Auditor's Findings and Recommendations" is a material weaknesses. This report is intended for the use of the management. This is not intended to limit the distribution of this report, which is a matter of public record. WILLIAM S. JONES, CPA Director, Department of Audit OFFICE OF THE STATE AUDITOR STEVEN A. PATTERSON AUDITOR 3750 I-55 NORTH FRONTAGE ROAD JACKSON, MISSISSIPPI 39211 (601) 364-2888 FAX (601) 364-2828 31 INDEPENDENT AUDITOR'S SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS April 15, 1996 Members of the Board of Supervisors Jefferson Davis County, Mississippi We have audited the primary government financial statements of Jefferson Davis County, Mississippi, as of and for the year ended September 30, 1995, and have issued our report thereon dated April 15, 1996. The Independent Auditor's Report on the primary government financial statements is qualified because the primary government financial statements do not include the financial data of component units, which should be included in order to conform with generally accepted accounting principles. We have also audited Jefferson Davis County, Mississippi's compliance with requirements applicable to major federal financial assistance programs and have issued our report thereon dated April 15, 1996. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-128, Audits of State and Local Governments. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the primary government financial statements are free of material misstatement and about whether Jefferson Davis County, Mississippi, complied with laws and regulations, noncompliance with which would be material to a major federal financial assistance program. In planning and performing our audits for the year ended September 30, 1995, we considered the county's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the county's primary government financial statements and on its compliance with requirements applicable to major federal financial assistance programs and not to provide assurance on the internal control structure. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to federal financial assistance programs. We have addressed policies and procedures relevant to our audit of the primary government financial statements in a separate report dated April 15, 1996. The management of Jefferson Davis County, Mississippi, is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of primary government financial statements in accordance with generally accepted accounting principles and that federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 32 For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering federal financial assistance programs in the following categories: General Requirements Political Activity Davis-Bacon Act Civil Rights Cash Management Allowable Costs/Cost Principles Administrative Requirements Specific Requirements Types of Services Matching, Level of Effort or Earmarking Reporting Special Requirements Claims for Advances and Reimbursements Amounts Claimed or Used for Matching For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended September 30, 1995, Jefferson Davis County, Mississippi, expended 99.59 percent of its total federal financial assistance under the major federal financial assistance program: Community development block grant. We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with specific requirements, general requirements and requirements governing claims for advances and reimbursements and amounts claimed or used for matching that are applicable to the county's major federal financial assistance program, which is identified in the accompanying Schedule of Federal Financial Assistance under Supplemental Information, as listed in the table of contents. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. 33 This report is intended for the use of the management, the cognizant agency and the appropriate grantor agencies. This is not intended to limit the distribution of this report, which is a matter of public record. WILLIAM S. JONES, CPA Director, Department of Audit 34 JEFFERSON DAVIS COUNTY (This page left blank intentionally) OFFICE OF THE STATE AUDITOR STEVEN A. PATTERSON AUDITOR 3750 I-55 NORTH FRONTAGE ROAD JACKSON, MISSISSIPPI 39211 (601) 364-2888 FAX (601) 364-2828 35 INDEPENDENT AUDITOR'S REPORT ON CENTRAL PURCHASING SYSTEM AND PURCHASE CLERK SCHEDULES (REQUIRED BY SECTION 31-7-115, MISS. CODE ANN. (1972)) April 15, 1996 Members of the Board of Supervisors Jefferson Davis County, Mississippi We have made a study and evaluation of the central purchasing system of Jefferson Davis County, Mississippi, as of and for the year ended September 30, 1995. Our study and evaluation included tests of compliance of the Purchase Clerk records and such other auditing procedures as we considered necessary in the circumstances. The Board of Supervisors of Jefferson Davis County, Mississippi, is responsible for establishing and maintaining a central purchasing system in accordance with Sections 31-7-101 through 31-7-127, Miss. Code Ann. (1972). In addition, the Board of Supervisors is responsible for purchasing in accordance with the bid requirements of Section 31-7-13, Miss. Code Ann. (1972). The Board of Supervisors of Jefferson Davis County, Mississippi, has established centralized purchasing for all funds of the county and has established an inventory control system. The objective of the central purchasing system is to provide reasonable, but not absolute, assurance that purchases are executed in accordance with state law. Because of inherent limitations in any central purchasing system, errors or irregularities may occur and not be detected. Also, projection of any evaluation of the system to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. The results of our audit procedures did not disclose any instances of noncompliance with state laws governing central purchasing and bid requirements. In our opinion, Jefferson Davis County, Mississippi, complied, in all material respects, with state laws governing central purchasing and bid requirements. The accompanying schedules of (1) purchases not made from the lowest bidder, (2) emergency purchases and (3) purchases made noncompetitively from a sole source are presented in accordance with Section 31-7-115, Miss. Code Ann. (1972). The information contained on these schedules has been subjected to procedures performed in connection with our aforementioned study and evaluation of the purchasing system and, in our opinion, is fairly presented when considered in relation to that study and evaluation. 36 This report is intended for use in evaluating the central purchasing system of Jefferson Davis County, Mississippi, and should not be relied upon for any other purpose. This is not intended to limit the distribution of the report, which is a matter of public record. WILLIAM S. JONES, CPA Director, Department of Audit . Supervisors Jefferson Davis County, Mississippi We have audited the primary government financial statements of Jefferson Davis County, Mississippi, as of and for the year ended September 30, 1995, and have issued. Supervisors Jefferson Davis County, Mississippi We have made a study and evaluation of the central purchasing system of Jefferson Davis County, Mississippi, as of and for the year ended September. County, Mississippi& apos ;s compliance with requirements applicable to major federal financial assistance programs and have issued our report thereon dated April 15, 1996. We conducted our audit in accordance