Agenda

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ARF- 1983

2- A

Work Session

Meeting Date:	07/30/2013
Submitted By:	Don McDaniel Jr., County Manager, County Manager
Department:	County Manager

Information

Request/Subject

Presentation of 2012 Financial Report, Single Audit Report and Findings, and Expenditure Limitation Report

Background Information

As stated in their May 18, 2012 engagement letter, the Auditor's responsibility as described by professional standards, is to express opinions about whether the financial statements prepared by management with the Board of Supervisors oversight are fairly presented in all material respects, in conformity with U.S. generally accepted accounting principles (GAAP). In planning and performing the audit the auditors considered the County's internal control over financial reporting and internal control over compliance. This Audit is for the year ended June 30, 2012.

Evaluation

The Annual Financial Report for the year ended June 30, 2012 as prepared by County Staff, indicates that Assets exceeded Liabilities by $70,267,348 (Net Assets). Of the $70,267,348, $24,182,980 are considered Unrestricted Net Assets.

In the Auditors Single Audit Report, the Schedule of Findings and Questioned Costs list 20 Findings.

In terms of Internal Control over Financial Reporting, 2 Findings (01 and 12) are considered Material Weaknesses, while 1 Finding (13) is considered a significant deficiency.

In terms of Internal Control over Financial Compliance, 5 Findings (14, 15, 16, 19, and 20) are considered Material Weaknesses, while 2 Findings (17 and 18) are considered Significant Deficiencies.

The Audit also contains 8 Items of Prior Audit Findings with the Auditors comments on the Status of each.

Staff has reviewed all of the Findings in the Audit and has responded (contained in the Audit) with our comments and Corrective Actions on each.

Conclusion

The resignation of the County Finance Director in April coupled with several vacancies in the Department delayed the completion of the Audit and may have contributed to the reasons for some of the Findings, particularly Finding 14 regarding reconciling records in a timely manner to allow sufficient time to complete the audit within 9 months following the end of the fiscal year. In addition, Finding 18 regarding grant cash management reports not being submitted timely and not being reviewed by supervisory personnel, can be attributed in large part to the lack of a Director and other key staff vacancies.

Corrective Actions have been identified on All Findings. County Management is actively recruiting for a Director and other vacancies are being filled in a timely manner to provide for implementation of the Corrective Actions.

Recommendation

The County Manager recommends the FY2012 Audit be accepted as presented with the understanding that staff is committed to implementing the Corrective Actions.

Please note that this is the last year CliftonLarsonAllen will be doing our Annual Single Audit. Moss-Adams LLP is currently engaged on behalf of the Auditor General and is working on our 2013 Audit.

Suggested Motion

Presentation of the Gila County FY2012 Financial Audit summary by Dennis Osuch, partner of CliftonLarsonAllen. (Don McDaniel)

Attachments
No file(s) attached.