Six months after finishing its 2015 audit report, Cass County says it’s caught up to its normal schedule and has released to the public the results of its 2016 audit.
The report is an audit of the county’s financial statements. It’s done on an annual basis. The audit work for 2015 and 2016 was done by KPM CPAs and Advisors, an outside firm based in Springfield, a change in work previously contracted out to Cochran Head Vick & Co. Cass County Auditor Ryan Wescoat credited KPM for its services, and said the switch in firms saves the county nearly $20,000.
Wescoat announced recently in a press release that he believes this is the first audit where the county has met (or in this case, preceded) its federal deadline.
Annual audits are typically expected to be ready by the end of June. As the auditor’s office explained, the county is required to complete and disclose its annual audit within the 180-day statutory requirement of the U.S. Securities and Exchange Commission.
Wescoat said meeting this disclosure deadline helps the county with its bond holders and improves the bond rating of the county, and said the completion of the 2016 audit in June is “the first time in the county’s history” that the auditor’s office has met the deadline.
Deputy Chief Auditor Derek Moorhead helped explained why in a recent interview. Moorhead works with Wescoat on the county’s audit team.
“There are different disclosure requirements and a lot of it depends on what you’re dealing with,” Moorhead said. “We are finally to the point of hitting the mark of a charter county, which is you have to exceed 100,000. If you take back his (Wescoat’s) three years in office now and his predecessor, there were roughly 72- to 74,000 people in the county. There were less requirements to disclose of things, so they were under less burden to report.”
Moorhead continued, “It’s not that there was wrongdoing in the past. A lot of is just we were too small of a county, and we’ve grown so much just in the last 15 years that we’re finally hitting the complexities.”
The 2016 report details five financial statement findings made by the outside auditors at KPM, many of which carried over from the county’s 2015 audit which was released in January. The auditor’s office says the findings are recommendations to improve county policies and public disclosures. The findings address sheriff inmate and bond accounts, public administrator ward receipts, the sheriff’s daily collection report, the health center daily collection report and grant administration and controls. The county has by now responded to each of the findings, the report indicates.
“We view findings as opportunities to improve. We don’t expect everyone to be perfect because we’re all human,” Wescoat said.
The auditing firm also provided 11 additional comments and recommendations made to the county, which included a new component required by the Governmental Accounting Standings Board (GASB). The implementation of a standard, known as GASB statement No. 77, now requires the county to report tax abatement disclosures. In tax abatement agreements, as defined by the GASB statement, a government promises to forgo tax revenues as an incentive to an individual or entity promising to contribute to economic development.
In its comments, KPM commended the county for becoming familiar with the new tax abatement disclosure requirement and implementing GASB statement No. 77 on time.
Officials say the added disclosure will help citizens better understand what’s going on in their local government, including Harrisonville, Raymore and Belton.
“The interesting thing about the GASB 77 is when you hear about all the cities doing TIFs and CIDs, the actual cost of that is what has to be reported now. For the county, $1.4 million is what we lost in revenue having to give back to TIFs and PILOTs (payments in lieu of taxes) and all of those things. Every city has to report now exactly what’s lost and make the disclosure to their citizens,” Wescoat said.
According to the report, the total amount of taxes abated in 2016 was $1,455,721 across TIFs authorized in Harrisonville, Raymore and Belton. As the report indicates, the $1.4 million, revenue from PILOTs and new economic activity taxes is used to pay for project costs or to retire obligations issued to pay project costs.
KPM other recommendations to the county include:
▪ To become familiar with the requirements of GASB statement No. 75 on accounting and financial reporting for post-employment benefits other than pensions to assess the steps necessary to ensure successful implementation of the statement.
▪ To develop policies and procedures to have an approved vendor list for purchases made by the county.
▪ To adopt a purchase order system.
▪ To adopt policies and procedures to ensure all contracts, including grant agreements entered into the county, are approved by the county counselor, auditor and commission.
▪ To utilize a project-tracking form when new grants are awarded with copies given to the county auditor and commission.
▪ To adopt policies and procedures to require all offices to turn in copies of all bank statements and reconciliations to the auditor’s office on a monthly basis to allow the auditor’s office to monitor compliance.
▪ To review the pooled sick leave process to ensure the county is complying with HIPAA.
▪ To adopt policies addressing procedures necessary for opening new bank accounts and to modify the depository agreement as necessary with its banking institutions.
▪ To require all receipt books to be controlled at administration and logged out to departments as necessary, and to require departments to turn in their old receipt book before a new one is issued.
KPM’s audit of the county’s financial statements was completed June 15. The 83-page report is available on the county auditor’s webpage at www.casscounty.com. The 2016 report is also expected to be presented to the county commission.
Aside from the audit reports, Wescoat said he encourages citizens to view monthly fund balance reports of the revenues and expenses of the county on the website. In addition to meeting its audit deadline, the auditor’s office said it believes this is the first time the county has consistently prepared the monthly reports, which are required by state statute
Overall, the auditor’s office said the county has improved in implementing internal controls and communication between departments.
“The county is moving in the right direction. We’re putting things in place. We’re becoming the professional the first-class county that we are,” Wescoat said.