La Plata County will have to spend more money for financial audits until at least 2019 because lingering issues in the Treasurer’s Office identified last year have not been fixed and are putting the county at risk of fraud.
Denver accounting firm RubinBrown told La Plata County commissioners on Wednesday that its 2017 audit determined the Treasurer’s Office “lacks sufficient internal control policies and procedures to ensure that all receipts and all transactions are properly authorized and recorded.”
As a result, “the county’s financial transactions may be more susceptible to uncorrected errors, and there is an increased risk of fraud going undetected,” according to the audit report.
The county’s finances are audited every year, and for years, they have been categorized as “low risk.” But last year, they were categorized as “high risk” because of problems in the Treasurer’s Office.
An agency is considered high-risk when an auditor determines it has a greater likelihood of running afoul with federal law. It is unclear how much additional money the county must pay for the audits from 2017 through 2019 until they are complete, said Megan Graham, spokeswoman for La Plata County.
Last year, the county had to pay Albuquerque-based firm Axiom $12,500 for an additional review to investigate inaccuracies after county Treasurer Allison Aichele told county commissioners there were several problems in her office.
Axiom’s review found numerous errors and inconsistencies in the office’s processing and bookkeeping. Despite that, the audit concluded there was no evidence of wrongdoing.
Aichele said at the time that the issues stemmed from a lack of staffing and lack of proper training. She said in May 2017 that most, if not all, of the issues had been resolved.
The county then hired RubinBrown to conduct its annual audit for 2017.
Matthew Marino with RubinBrown said Wednesday that the firm’s review found unresolved problems in Aichele’s office and that requires the county to continue to be categorized high-risk. Some examples of the findings include:
Two users on the county’s finance system were no longer county employees but still had user profiles and access to several banking functions.At peak collection times, the office had one employee receive payments and also enter them into the system, which auditors said poses a risk for securing transactions.A large amount of cash, about $800,000, was erroneously being held in a fund as “accounts payable to external parties” when it should have been recorded in the county’s General Fund. This issue caused misstatements in last year’s financial reports.Aichele assured commissioners Wednesday that these issues have been fixed by implementing best-practice recommendations from RubinBrown. She also drafted a list of corrective actions.
“We’ve implemented every single one of your recommendations since we got this report less than a month ago,” Aichele told the auditors. “We have been trying to get better and better and better with our internal controls.”
Marino said the firm will review the office next year to see if all issues have been resolved.
“Obviously, it would have been nice to have a clean audit report,” La Plata County Commissioner Julie Westendorff told The Durango Herald after Wednesday’s meeting. “But the fact there are significantly fewer problems this year than there was last year is an improvement.”
On Tuesday, Aichele – who is in her first term in office – won the Democratic primary for treasurer, beating challenger Tim Walsworth. She will face Republican Colton Black in the November General Election.
The Treasurer’s Office collects and distributes revenue, including collecting property taxes.
The Herald had requested RubinBrown’s audit multiple times before Tuesday’s primary election, but the county denied these requests.
Aside from one filing issue with the county’s finance department, RubinBrown found La Plata County as a whole to have an otherwise clean report. Marino commended the “top notch” county management and its ability to work with the firm.