Because Google Has Not Fixed The Problem That Allows Viewing Of Post Over The 200 Number This Is Being Re-posted And The Post Over 200 Are Included.
Audit ending 30 June 2011 for Giles County with six findings and recommendations, which have been reviewed with
Giles County management.
OFFICE OF FINANCE DIRECTOR
♦ A revenue anticipation note was not issued in compliance with state statute.
OFFICE OF DIRECTOR OF SCHOOLS
♦ Expenditures exceeded appropriations.
♦ The School Department had deficiencies in the use of federal Special Education Cluster funds.
OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK
♦ The office did not deposit some funds within three days of collection.
♦ The court software did not have adequate application controls.
OFFICES OF CLERK AND MASTER, REGISTER, AND SHERIFF
♦ Duties were not segregated adequately.
FINDING 11.01 A REVENUE ANTICIPATION NOTE WAS NOT ISSUED IN COMPLIANCE WITH STATE STATUTE
(Material Noncompliance Under Government Auditing Standards) During the year, the Highway/Public Works Fund borrowed $450,000 from the General Fund to provide cash for operations in anticipation of revenue collections. This loan was not approved by the state Comptroller’s Office. Section 9-21-801, Tennessee Code Annotated, allows the County Commission to issue revenue anticipation notes with the approval of the state Comptroller’s Office. This deficiency resulted from a lack of oversight by management.
RECOMMENDATION
Revenue anticipation notes should be approved by the state Comptroller’s Office as required by state statute.
________________________
OFFICE OF DIRECTOR OF SCHOOLS FINDING 11.02 EXPENDITURES EXCEEDED APPROPRIATIONS
(Noncompliance Under Government Auditing Standards)
Salaries exceeded appropriations in 32 payroll line-item accounts in the General Purpose School and School Federal Projects funds by amounts ranging from $2 to $119,534. Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various departments, commissions,
institutions, boards, offices, and agencies of county governments shall be appropriated to such use by the county legislative bodies.” Also, the budget resolution approved by the County Commission states that the salary, wages, or enumeration of each official, employee, or agent of the county will not exceed expenditures that accompany this
resolution. Therefore, the salaries that exceeded line-item appropriations were expenditures not approved by the County Commission. These deficiencies exist because management failed to hold spending to the limits authorized by the County Commission, which resulted in unauthorized expenditures.
RECOMMENDATION
Expenditures should be held within appropriations approved by the County Commission.
_____________________________
FINDING 11.03 THE SCHOOL DEPARTMENT HAD DEFICIENCIES IN THE USE OF FEDERAL SPECIAL EDUCATION CLUSTER FUNDS(Noncompliance Under Government Auditing Standards and OMB Circular A-133)
On September 29, 2010, the State of Tennessee, Department of Education, Division of Special Education released a monitoring report on the Special Education Cluster programs in Giles County for the fiscal year ending June 30, 2010. The results of that monitoring disclosed the following deficiencies: A. The School Department allowed an Odyssey software program paid for and tagged as equipment purchased with IDEA Recovery Act funds to be used by
all students, rather than exclusively by special education students. The School Department has subsequently repaid the $50,000 in unallowable costs to the Tennessee Department of Education from the GeneralPurpose School Fund.
B. The School Department allowed an IDEA funded teacher to work with higher level kindergarten students from December 2009 through May 2010. The School Department calculated the time spent on unallowable activities at
76.5 hours, for a total salary and benefits cost of $2,910. The School Department has subsequently repaid the unallowable costs to the Tennessee Department of Education from the General Purpose School Fund. This monitoring report along with management’s responses and corrective action plans may be obtained from the state Department of Education, Division of Special Education,
_________________________
OFFICE OF CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK FINDING 11.04 THE OFFICE DID NOT DEPOSIT SOME FUNDS WITHIN THREE DAYS OF COLLECTION
(Noncompliance Under Government Auditing Standards)
In some instances, the clerk did not deposit funds within three days of collection. Section 5-8-207, Tennessee Code Annotated (TCA), requires county officials to deposit public funds to the office bank account within three days of collection. This deficiency is the result of management oversight. The delay in depositing the funds increases the risks of fraud and misappropriation.
RECOMMENDATION
The clerk should ensure that all funds are deposited to the office bank account within three days of collection as required by state statute.
MANAGEMENT’S RESPONSE – CIRCUIT, GENERAL SESSIONS, AND JUVENILE COURTS CLERK
I would like to add that there was no fraud or misappropriation of funds found. Our auditor sat down with us and showed us the problem, and we have taken steps to correct it. Deposits will be taken to the bank in a manner to comply with TCA Section 5-8-207.
_____________________________
FINDING 11.05 THE COURT SOFTWARE DID NOT HAVE ADEQUATE APPLICATION CONTROLS
(Internal Control – Significant Deficiency Under Government Auditing Standards) The following deficiencies relating to the office’s software application were identified:
A. Although the application was designed to generate a consecutive number for each receipt, the auditor observed instances of skipped receipt numbers on daily collection reports. These skips could not be explained by the vendor. On other occasions, one receipt number was assigned to multiple receipts.
B. Users could receipt collections to a previous date. This created a skip in the receipt numbers listed on the current day’s collection report. However, because of the irregularities noted in Item A., it would be difficult to
determine what caused the skip.
C. On a least one occasion, the software application generated a check to the wrong payee. These deficiencies could call into question the reliability and integrity of information maintained in the system. Controls addressing these deficiencies have been implemented by the vendor; therefore, these deficiencies have been corrected.
_____________________________
OFFICES OF CLERK AND MASTER, REGISTER, AND SHERIFF FINDING 11.06 DUTIES WERE NOT SEGREGATED ADEQUATELY
(Internal Control – Significant Deficiency Under Government Auditing Standards)
Duties were not segregated adequately among the officials and employees in the Offices of Clerk and Master, Register, and Sheriff. The officials and employees responsible for maintaining accounting records were also involved in receipting, depositing, and/or disbursing funds. Accounting standards provide that internal control disbursing funds. Accounting standards provide that internal controls be designed to provide reasonable assurance of the reliability in financial reporting and of the effectiveness and efficiency in operations. This lack of segregation of duties is the result of management decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions. Also, this deficiency is the result of management’s failure to correct the finding noted in the prior-year audit report.
RECOMMENDATION
The clerk and master, register, and sheriff should segregate duties to the extent possible using available resources.
MANAGEMENT’S RESPONSE – REGISTER
The cost of hiring enough employees to segregate each step involved is not feasible for the Register’s Office. We now have only two employees in the office. The budget will not allow us to increase our staff to comply with this recommendation.
AUDITOR’S COMMENT
We have not recommended hiring additional employees. We realize that due to limited resources and personnel, management may not be able to fully segregate duties among employees. However, duties should be segregated to the extent possible.
