BY MARK J. CRAWFORD
Accounting issues in the sheriff’s office resulted in a late audit for Bradford County.
Brendan McKitrick of James Moore and Company delivered the results of that Fiscal Year 2023 audit to county commissioners last week, highlighting growth in funds, but some timeliness issues that need to be addressed in Sheriff Gordon Smith’s finance office.
“I did want to thank the commission again for the opportunity to perform the audit this year. And I also wanted to address that we are late with the audit this year. We did have some challenges, specifically in the sheriff’s office, with getting that audit completed,” he said.
Staffing changes as well the move to a new accounting software system were credited for the difficulty. While the sheriff’s office did engage a third-party CPA to come in and work on the books, they weren’t brought in for the audit until August.
“We’ve had conversations with their office, really talking about how we can improve this next year,” he said.
The deadline for the completion of the audit is the end of June. McKitrick noted audits for the commission and other constitutional officers were completed in April or May.
The audit contains two significant issues and two recommendations for the sheriff’s office. Auditors noted the sheriff’s offices historic reliance on external auditors to prepare financial statements and make yearend adjustments, resulting in delayed reporting and potential inaccuracies. Ultimately, a third-party CPA was brought in to prepare financial records for auditors, including reconciling bank activity to the general ledger. External auditors should not be engaged in the audited organization’s internal controls, so they recommended the sheriff’s office continue to engage outside accounting assistance for guidance and reviews throughout the year.
The other finding involved multiple account balances requiring adjustment — including capital outlay expenditures, fixed asset balances, depreciation expense balances and grant revenue — to accurately present the financial statements. Auditors recommended reconciling significant transactions throughout the year and at year’s end for accuracy and completeness.
Additional recommendations for financial management included actively monitoring budget-to-actual spending comparisons to avoid overspending and making budget amendments throughout the year as necessary.
Finally, the sheriff’s office did not complete an annual report to the Florida Chief Financial Officer, which could result in a loss of protection from the state on public depositor funds. This needs to be submitted annually by Nov. 30.
In the sheriff’s response, Smith said they will continue to engage outside assistance for periodic reviews and audit preparation. Quarterly budget reviews will be scheduled. The office also has a financial administrator on staff now with more than 25 years of government accounting experience.
Revenue was received in excess of what was budgeted, according to the sheriff, leading to the over expenditures. Budget amendments should have been completed and will be in the future. Failure to submit the financial report to the CFO was declared a clerical oversight that has already been rectified.
Last year, the sheriff’s office received similar comments about the need for outside accounting services and budget amendments.
The county received an unmodified opinion from auditors on its major funds, meaning its financial statements fairly present the county’s financial position. It received a qualified opinion on governmental activities, meaning the financial statements also fairly present the position of those activities, but the county has not implemented standards that measure the postemployment health benefits liabilities.
The county’s expenditure of federal funds more than $750,000 was also audited with no findings, nor were there material weaknesses, issues of noncompliance or modifications necessary in other sections of the audit.
McKitrick showed that the county’s general fund balance has increased from $5.7 to $18.2 million since the end of Fiscal Year 2021. Of that amount, nearly $15.4 million of that funding is assigned compared to $183,491 at the end of 2021. Meanwhile, the unassigned fund balance has dropped from $5.3 million to $2.75 million. The county had less unassigned money in the general fund going into the current fiscal year.
McKitrick next compared the combined assigned and unassigned fund balance to the spending and transfers out of the general fund, which for the current year tops $35 million. Comparing that with the total $18.2 million general fund balance shows that at 51.5%, the fund balance is well above the minimum 16.7% recommended by the Government Finance Officers Association. That was up from 47.8% last year.
As for the other departmental funds, McKitrick showed the nearly $12.5 million total was down almost $4.4 million from the prior year. There were no deficits in individual funds, however. The library ended 2023 with $467,625. Transportation Trust had more than $2.8 million remaining. Fines and Forfeitures had $2.1 million. The other nonmajor governmental funds totaled $2.1 million.
The county also has nearly $5 million in American Rescue Plan Act funding remaining, although it has been assigned to capital projects.
A decrease in capital outlay spending and a tax increase caused revenue to exceed expenditures by $1.7 million in 2023, according to management’s analysis. The county’s net position was $51 million (total assets and deferred outflows minus total liabilities and deferred inflows). Of that amount, $6.6 million was unrestricted for governmental activities, $3.2 million was restricted and the remaining $41.1 million represents investment in capital assets.
