Audit delay explained

Published 1:56 pm Tuesday, July 18, 2017

JACKSON – A delayed audit for Northampton County has caused a lot of headaches for the local government as they worked to get a budget passed for the 2017-18 fiscal year.

County Manager Kimberly Turner says she wants the public to understand the extenuating circumstances that delayed the annual audit and how that was taken into consideration when the commissioners voted on the new budget.

According to Turner, the issue began when the previous auditor notified the county at the last minute that they would not be working on the audit for the 2015-16 fiscal year. The county had to go through the whole process of finding a new auditor before they could get started.

A contract to work with the new auditor was signed on Oct. 3, 2016. Turner says that October is about a month or two later than when they typically submit their books for the audit. Additionally, because the auditors had never previously worked with Northampton County, they had to spend extra time familiarizing themselves with the large amount of information they were working with.

Not only was the start delayed, but another setback further slowed down the audit process. In March of 2017, Turner says that the Finance Director Leslie Edwards discovered a problem with the reconcilement of the bank account in the general ledger from prior years. Turner says the problem was not an error made by any of the current finance staff.

Because of the magnitude of the bookkeeping issue, the county had to turn to outside assistance to rectify the problem. After consulting with the Local Government Commission (LGC), Northampton County hired a CPA firm to fix the problem. It was June before the firm submitted the corrected information back to the county.

The combination of these various circumstances led to the long delay in receiving the audit information. Currently, Turner says the auditors are still working on finishing up the audit for the 2015-16 fiscal year.

Turner continued with clarification on the circumstances surrounding the newly passed budget as well.

All counties are required by state law to approve an operating budget by July 1 each year, Turner explains. If a budget is not passed, the county is not able to order goods, enter into service contracts, pay bills, or pay staff salaries.

Turner also explains that counties do have an alternative option to approve an interim appropriation instead if a new budget is not submitted by the deadline. This would allow the county to pay salaries, service debts, and make payments for usual expenditures. They would not, however, be able to levy property tax, assess new fees, or assess new expenditures.

According to Turner, failure to adopt a budget would send negative signals about the stability of Northampton County and their local government. It was in the county’s best interest to pass the proposed budget, she says, especially since they are able to make changes afterwards in the form of budget amendments.

They didn’t just come up with the budget overnight, Turner notes. The Board of Commissioners met for their first budget workshop meeting on May 11. After several additional workshop sessions, they agreed on the budget that was submitted for public hearing on June 27. That budget was passed with a 3-2 vote at that same meeting.

“We’re trying to fix a problem from past years,” Turner said in response to the delayed audit, also citing the hard work the staff has been doing to correct the issue.

Once the 2015-16 FY audit is done, the county should be back on track and on schedule. Turner says the new auditor will also perform the 2016-17 FY audit and should meet the regular deadline of December 31.