STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR PHIL BRYANT _part5 ppt

41 SUNFLOWER COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 42 SUNFLOWER COUNTY (This page left blank intentionally) SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 43 A. Summary of Auditor's Results 1. The auditor's report expresses a qualified opinion on the primary government financial statements of Sunflower County, Mississippi. 2. Three reportable conditions in internal control over financial reporting are disclosed by the audit. No condition is reported as a material weakness. 3. No instances of noncompliance material to the financial statements are disclosed by the audit. 4. No reportable conditions in internal control over the major program are disclosed by the audit. 5. The auditor's report on compliance over the major federal award program of Sunflower County, Mississippi, expresses a qualified opinion. 6. Seven instances of noncompliance relative to the major federal award program for Sunflower County, Mississippi, are disclosed by the audit. 7. The program tested as a major program was the Home Investment Partnership Program – CFDA #14.239. 8. The threshold for distinguishing Types A and B programs is $300,000. 9. Sunflower County, Mississippi, was not determined to be a low-risk auditee. 10. There are no prior audit findings and questioned cost relative to federal awards which would require the auditee to prepare a summary schedule of prior audit findings as discussed in Section _____.315 (b) of OMB Circular A-133. B. Findings - Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of the Primary Government Financial Statements Performed in Accordance With Government Auditing Standards Chancery Clerk. 97-1. Finding We noted the following weaknesses in the controls over the collection of land redemption and Chancery Clerk filing fees: a. One deputy clerk=s receipt books were missing for some time periods. b. Receipts were not written for payments made by check. c. Some collections could not be traced to the deposit slips. d. Computer-generated receipts could be voided by any deputy instead of only deputies with authorization to void. SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 44 Recommendation The Chancery Clerk should implement controls to ensure that all fees are properly collected and accounted for. Failure to properly prepare and maintain accounting records could result in the loss of public funds. 97-2. Finding Section 7-7-211, Miss. Code Ann. (1972), gives the Office of the State Auditor the authority to prescribe accounting systems. The Mississippi County Financial Accounting Manual states that funds should be centralized in the county's accounting records. The Community Development Block Grant fund was not accounted for in the county's centralized accounting records. Failure to centralize all funds in the county=s accounting records could result in some funds not being included in the financial statements. Recommendation The Chancery Clerk should comply with the accounting system prescribed in the manual by recording all funds in the county=s centralized records. Service Organization - Delta Computers. 97-3. Finding The solid waste system supplied by Delta allows edit and deletion of critical records. This system requires an unaltered numbered original to ensure adequate internal control. This software package can be used with or without prenumbered original documents. Recommendation Processes that require original unaltered documents with a sequential preassigned number should be modified to allow voiding but not edit or deletion. The counties using this system should use prenumbered originals. SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 45 C. Findings - Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 Board of Supervisors 97-4. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Special tests and provisions The Rehabilitation Policies, Procedures and Guidelines for the HOME grant adopted by the county require that interim and final inspections be made on all houses that were rehabilitated with grant funds. We found that some interim inspections were not performed and none of the final inspections showed that all required work had been completed. Because of this, we were unable to determine if all the proper materials were used and all the required work was performed according to the contracts. Recommendation The Board of Supervisors should require that the grant administrator submit detailed documentation of all interim and final inspections to ensure that all work required by the contract was completed. 97-5. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Eligibility The Rehabilitation Policies, Procedures and Guidelines for the HOME grant adopted by the county specify that income eligibility limits are the same as those established by HUD for low income persons. The annual income is determined to be the amount shown for income tax purposes for the previous taxable year. On one HOME project, it appears that the income for one person exceeded the allowed amount, based on the prior year income tax return. The amount that was used was based on one paycheck amount, multiplied by a yearly factor. On another project, we could not read the documentation shown to verify the income of the person applying for the funds. The payments for Project Number 3783200002 appear to be in violation of the grant requirements, resulting in questioned costs of $13,922. Recommendation The Board of Supervisors should ensure that the grant administrator verifies that all persons applying for HOME grant funds meet the income eligibility standards before the projects are approved. Any person exceeding the income eligibility limits should not be approved to receive the funds. Questioned Costs: $13,922 SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 46 97-6. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Special tests and provisions The Rehabilitation Policies, Procedures and Guidelines for the HOME grant require that in order for any contractor to be eligible to bid on rehabilitation contracts, he must provide a certificate of liability insurance and a Mississippi contractor=s license. Based on the documentation provided by the grant administrator, one contractor had both documents for only a portion of the time period covered by the audit, and the other contractor did not have either one. Recommendation The Board of Supervisors should ensure that the grant administrator verifies that any contractor bidding on any of the HOME projects has liability insurance and a contractor=s license for the entire time period that he will be working on the projects. 97-7. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Special tests and provisions The Rehabilitation Policies, Procedures and Guidelines for the HOME grant require that the grant administrator make interim and final inspections of all work performed to ensure compliance with the approved contracts. The final inspection reports must be signed by the grant administrator and the homeowner. We noted that some of the reports were not signed by the homeowners. Recommendation The Board of Supervisors should ensure that the grant administrator obtain the required signatures for all inspection reports. 97-8. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Special tests and provisions Each contract between the homeowner and contractor for residential rehabilitation requires that any change in the contract amount or work to be done be accepted in writing by the owner, the county, the contractor and the grant administrator. We noted the following deviations from the requirements: SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 47 a. Some change orders were not signed by the homeowner. b. Some change orders were not signed by the contractor. c. Some change orders were approved by a blanket board order instead of being approved individually. Also, the blanket board order was approved after the changes were made. d. The contracts on some projects exceeded the bid amounts accepted by the Board of Supervisors. The amount of the contracts included additional costs that were in change orders that were approved before the contract was actually executed. Recommendation The Board of Supervisors should ensure that all contracts and change orders are executed and approved in a proper manner and sequence. 97-9. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Reporting The project completion report required for each home should include the total costs for the project. We noted that the completion report for project #3783200008 did not agree with the actual total amount of funds expended for the project. Recommendation The Board of Supervisors should ensure that the grant administrator files an amended project completion report to correct the error. 97-10. Finding U. S. Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No. 14.239; Grant No. M95-SG-28-0190. Compliance Requirement: Special tests and provisions Two projects, numbers 3783200015 and 3783200017, did not have the required project setup report to verify the total amounts to be expended on these projects. This caused us to be unable to verify the total amounts submitted to the Department of Housing and Urban Development for these projects. Recommendation The Board of Supervisors should ensure that project setup reports are prepared for all projects and submitted to the proper agency. SUNFLOWER COUNTY Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997 48 $ The findings listed below in Section D are not required to be reported under Government Auditing Standards or in compliance with OMB Circular A-133. D. Findings - Independent Auditor's Report on Compliance With State Laws and Regulations Board of Supervisors. 1. Finding Section 19-11-17, Miss. Code Ann. (1972), prohibits the incurring of expenditures in excess of the final budget as approved by the Board of Supervisors. Actual expenditures exceeded budgeted amounts in one of the funds. Recommendation The Board of Supervisors should not make expenditures in excess of budgeted amounts. Board of Supervisors' Response We will amend budgets on all funds in the future. Tax Collector. 2. Finding Section 7-7-211, Miss. Code Ann. (1972), gives the Office of the State Auditor the authority to prescribe accounting systems for county offices. The Tax Collector is required to reconcile the amount of legislative credit recorded on the Tax Collector=s cash journal to the report issued by the State Tax Commission each month. Any differences noted should be documented as to the reason for the difference. At September 30, 1997, there was an unidentified balance in the journal. Recommendation The Tax Collector should reconcile the amount received from the state each month to the amount shown as due from the state in the cash journal, and any differences should be accounted for. 49 Tax Collector=s Response This is now being done on a new computer program. 50 Sheriff. 3. Finding There is no authority for the Sheriff to collect Justice Court fines because the Sheriff=s deputies are not bonded to collect such fines. During the audited fiscal year, we found that some fines collected by a Sheriff=s deputy were stolen from his patrol car and the money has not been recovered. Recommendation The Sheriff should stop collecting Justice Court fines and properly account for all funds in his possession. Sheriff=s Response I have instructed all personnel to no longer collect fine money. . result in the loss of public funds. 97-2. Finding Section 7-7-211, Miss. Code Ann. (1972), gives the Office of the State Auditor the authority to prescribe accounting systems. The Mississippi. the Office of the State Auditor the authority to prescribe accounting systems for county offices. The Tax Collector is required to reconcile the amount of legislative credit recorded on the Tax. unidentified balance in the journal. Recommendation The Tax Collector should reconcile the amount received from the state each month to the amount shown as due from the state in the cash journal, and