Audit uncovers discrepancies in financial statements and violations of Century Codes
BISMARCK, N.D. (KFYR) - A recent audit uncovered a $23 million discrepancy in Stark County’s cash reserve balance, but that was only one of the many concerns the State Auditor’s office has.
In a commission meeting Tuesday, many of the commissioners and county department leaders say they were unaware of the six irregularities found by the North Dakota State’s Auditor’s Office.
Of the six, many were discrepancies in financial statements and violations of North Dakota Century Codes.
The biggest problem in this report from the state auditor, was the county’s general fund exceeding the state’s cap by 257% or $23.3 million.
“We left it there so it was transparent. They have made suggestions to us about what we need to do, yes, but ours is really easy to read when you take a look at where our reserves are,” said Jay Elkin, Stark County Commissioner.
North Dakota Century Code states a county’s cash reserve for the general fund cannot exceed 75% of the appropriation fund.
Stark County was only allowed $10.3 million into its general fund. However, it had $33.6 million in the year-end cash reserve.
“They didn’t tell me that they had a couple of individuals call in and we’re concerned that our reserves were heavy. And you know what? People have a right to do that,” said Elkin.
The audit claims the purchase of county equipment was not bid out correctly.
Century code says anything over $100,000 must be advertised twice for bids.
“The lease on them trucks, I ran it by legal counsel before we did it and they said it was okay, so apparently there was some more stuff in the century code that did not allow that,” said Allen Heiser, Stark County Road Superintendent.
Other issues include not having fraud risk assessments, lack of segregations of duties and not obtaining adequate assets.
The auditor’s office recommended Stark County review its cash reserve balance and special revenue fund before finalizing any budget.
“Cash reserves are needed and if we did not have these cash reserves, your property taxes would have already gone up substantially,” said Elkin.
The county has not yet determined how it will reduce its $23.3 million excess balance.
The county agreed with all recommendations made by the auditor’s office and will drain the general fund account to the state’s recommended amount of $10.3 million.
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