By Patrick Tepoorten

Bookkeeping, policy, and procedure were the focus of the state's 2005 audit of Chisago County, an audit that took on increased depth after a resident revealed problems with the county's Masters of Social Work (MSW) program earlier this year.

Because of accounting and policy deficiencies discovered by the state investigation of the MSW program, it was decided that the audit would take a close look at county functions, closer than it would have otherwise.

The audit is in draft form, meaning it does not contain responses to concerns by County Administrator John Moosey, but Moosey did provide those responses for purposes of this story.

One area of concern for the state was what it deemed a widespread lack of written accounting policies and procedures within the Chisago County Department of Health and Human Services (HHS). The report says, "Staff we interviewed could not tell us the location of any written procedures."

Other areas of concern to the state include the lack of a log to track incoming funds received, and a deficiency in oversight in creating new vendors.

Essentially, the report stated, "several social services staff have the ability to create new vendors without supervisory oversight."

Expenditure oversight was also an issue for the state, which found no formal structure or written policy guiding the approval of expenditures.

"Our tests of disbursements from the Social Welfare Fund found seven of 13 disbursements lacked sufficient documentation to support the claims," said the report.

The state recommends that HHS take action to strengthen internal controls, which Moosey intends to do in the coming year.

In fact, Moosey pointed out that some repairs to the system have already been implemented.

A log for funds received and what Moosey called a "tightly controlled" process for approving new vendors was implemented in November of this year, and stricter requirements for documenting disbursements was implemented in September.

The creation of written policies for accounting procedures is expected to be completed by July of next year as well.

The county System Authorization and Utilization Team (SAUT), which reviews and approves many expenditure items for HHS, is currently under an inter-departmental review. Were the county to continue SAUT, Moosey expects it will be in an advisory role, with all approvals coming directly from a Director of Finances and Operations.

The position of Director of Finances and Operations has not yet been created, but it is expected as part of an organizational restructuring of the entire department, to be overseen by HHS Director Mary Sheehan, if that restructuring is approved by the county board. Sheehan is expected to detail the department reorganization tonight at the county board meeting, 6:30 p.m.

A by-product of the MSW investigation, which determined that the county must return $62,874 in federal funds, and the subsequent annual audit, is that the county has been deemed a "high risk" audit in areas in which the county receives federal funding.

This will include any county department in which federal dollars are received and means that, for the next two annual audits, the state will be looking doubly close at how those funds are implemented.

According to Moosey, future audits will test twice as many items as when the county was considered low risk.

If errors in the accounting of federal funds continue, that status could continue as well, but if the county improves its accounting and can demonstrate that federal funds are properly accounted for, the high risk designation will be removed after two years.

Other findings of the audit:

ï The Sheriff's Office was found to have made "substantial progress" in accounting practices related to prisoners' accounts. Prisoner accounts are comprised of bond money, pay earned while in jail, and any money defendants brought into jail.

Sheriff Todd Rivard had requested the state take a closer look at those practices after the 2004 audit.

Although the state credited Rivard with making great strides to correct the deficient process, it also highlighted areas that still need attention, including the completion of a written policy and procedure.

ï The state found that the county does not have in place a comprehensive manual of accounting policies and procedures. It recommends that one be created and approved by the county board.

Moosey stated in his response to the state, "We will make every effort to develop a written policy."

ï In areas of expense reimbursement for county commissioners and officials the state made multiple recommendations regarding the forms used and required documentation of expenses.

Moosey informed the state that policies regarding most of these trouble spots were implements in October of 2006.

One exception is the proper use of store accounts, but Moosey insisted that a policy governing store accounts is currently being drafted with an eye toward limiting the use of the accounts.

ï The audit addressed a hot button issue of last year; the relationship between the county and Chisago County Recreation (CCR), which is overseen by county commissioner Bob Gustafson.

Despite having recommended that the county create contracts defining the terms of the relationship, the audit found that no written agreements have been created. The CCR is not a program of Chisago County.

Moosey responded by pointing out that no expenditures were made to the CCR in 2005, but agreed to have the County Attorney's Office draft an agreement anyway.