The State Auditor’s Chief Inspector Division ensures that financial accountability is present at the local level of government by annually conducting and overseeing over 700 financial audits of counties, municipalities, boards of education and other miscellaneous local boards and authorities. Calhoun’s audit has been conducted pursuant to the authority and duty of the State Auditor as Chief Inspector and Supervisor of Public Office.
The Scheduled funds included in the report to follow for Fiscal year ending June 30, 2021 are the following:
GOVERNMENTAL FUND TYPES
MAJOR FUNDS
- General
- Coal Severance Tax
- Emergency Communication 911 County Excess Levy
- American Rescue Plan
NONMAJOR FUNDS
- Special Revenue Funds
- Dog and Kennel
- General School Magistrate Court Worthless Check
- Home Confinement Concealed Weapons Assessor’s Valuation
- Jury and Witness
- Prosecuting Attorney Forfeiture Sheriffs Drug
- Canine
- COVID-19
FIDUCIARY FUND TYPE
- Custodial Funds
- State
- School
- Municipal
- Other Custodial
DISCRETELY PRESENTED COMPONENT UNIT
- Calhoun County Public Library
- Calhoun County Building Commission
The findings in this audit are found below. If you’d like to read the audit in it’s entirety follow this link:
CALHOUN COUNTY, WEST VIRGINIA
SCHEDULE OF FINDINGS AND RESPONSES FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Cash Drawers
2021-001
CONDITION:
We determined during our audit that multiple individuals work out of a single cash drawer in the offices of the Calhoun County Assessor, Calhoun County Circuit Clerk, and Calhoun County Sheriff.
CRITERIA:
Proper internal controls dictate that a separate cash drawer be utilized by individual personnel.
CAUSE:
The Calhoun County Assessor, Calhoun County Circuit Clerk, and Calhoun County Sheriff do not have a system to ensure that all individual personnel are properly maintaining a separate cash drawer.
EFFECT:
Internal control elements do not reduce to a relative low level of risk that errors and/or irregularities could occur and not be detected in a timely manner.
RECOMMENDATION:
The Calhoun County Assessor, Calhoun County Circuit Clerk, and Calhoun County Sheriff should implement systems to ensure that individual cash drawers are maintained.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS:
All offices are working on having different cash drawers, but until then each office balances every day with the drawers. Receipts balance to transactions on a daily basis.
Segregation of Duties
2021-002
CONDITION:
We noted during our audit that there is an insufficient segregation of duties in the offices of the Calhoun County Clerk, Calhoun County Circuit Clerk, Calhoun County Assessor, and Calhoun County Sheriff. Specifically, we noted that the same employees can many times prepare checks, reconcile bank accounts, prepare and make deposits, collect fees and other revenues, and prepare the monthly reports in the respective offices.
CRITERIA:
Proper internal control procedures require that various duties be segregated among different employees, to make the likelihood of an improper use of monies less possible. The duties of collecting, recording, depositing, reconciling, and disbursing of monies should be separated. A proper segregation of duties can also make it more likely that errors made can be discovered and corrected in a timely fashion.
CAUSE:
The Calhoun County Clerk’s, Calhoun County Circuit Clerk’s, Calhoun County Assessor’s, and Calhoun County Sheriffs offices have not implemented proper control procedures to sufficiently segregate duties.
EFFECT:
The possibility of discrepancies occurring without being detected, or of an improper use of funds, is greatly increased.
RECOMMENDATION:
The duties of writing receipts, preparing and making deposits, issuing checks, reconciling bank accounts, and preparing the monthly statements for the Calhoun County Clerk’s, Calhoun County Circuit Clerk’s, Calhoun County Assessor’s, and Calhoun County Sheriffs offices should be segregated among different employees.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS:
All elected officials’ offices are still working on segregation of duties. In small counties, with limited number of employees we strive to segregate as many duties as possible. Each office does balance receipts and deposits on a daily basis.
Expenditures in Excess of Amounts Allocated in the Levy Estimate- Coal Severance Tax Fund
2021-003
CONDITION:
We noted during our audit that the Calhoun County Commission incurred expenditures for certain items in the Coal Severance Tax Fund in excess of the amounts allocated for that item in the official levy estimate (budget) as last revised. Specifically, expenditures in the following budget category exceeded the approved amount:
Account
NumberLine ItemBudgetActualVariance
424Courthouse$9,063$12,434$(3,371)
CRITERIA:
West Virginia Code §11-8-26 states, in part, that:
“…a local fiscal body shall not expend money or incur obligations:
(1) In an unauthorized manner;
(2) For an unauthorized purpose;
(3) In excess of the amount allocated to the fund in the levy order;
(4) In excess of the funds available for current expenses.”
CAUSE:
The Calhoun County Commission and the Calhoun County Clerk did not have a policy in place to
accurately monitor compliance with this statute.
EFFECT:
The Calhoun County Commission, Calhoun County elected officials, and/or department heads incurred
expenditures and/or encumbrances that were in excess of the amount allocated in their various budget line
items.
RECOMMENDATION:
The Calhoun County Commission, Calhoun County elected officials, and/or department heads are directed to implement effective budgetary controls to ensure that actual expenditures and/or encumbrances do not exceed the amounts allocated for these expenditures in the official levy estimate (budget) as approved by the State Auditor. Revisions are authorized with prior written approval if submitted prior to the end of the fiscal year.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS:
The Coal Severance Fund should have had a budget revision to reflect additional monies received. Procedures have been established to assure this doesn’t happen in the future.
Detailed Capital Assets and Depreciation Schedules
2021-004
CONDITION:
We noted during our audit that Calhoun County Commission failed to maintain adequate detailed capital asset and depreciation schedules.
CRITERIA:
Generally accepted accounting principles dictate that depreciation be charged against operations over the estimated useful lives of the capital asset.
CAUSE:
Calhoun County Commission has no controls in place to ensure that a particular asset is included on an asset listing and depreciated properly.
EFFECT:
The Commission could lose custodial control over certain assets that are susceptible to theft. Additionally, capital assets may be under reported on the annual financial statements. This prompted a qualification of opinion.
RECOMMENDATION:
The Commission should take an inventory to determine what capital assets can be properly identified and included on a detailed capital asset schedule. The Commission should continue to update this schedule as purchases and deletions occur. In addition, the Commission should depreciate these assets using a methodology in accordance with generally accepted accounting principles.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS:
The County is working on an inventory system and a file has been created to track any new purchases and deletions. We will be working with the person who does the financial statement to assure that depreciation of assets occurs in accordance with accepted principles.
Status of Prior Year Audit Findings
Finding
NumberTitleStatus
2020-001 Cash DrawersRepeated
2020-002 Segregation of DutiesRepeated
2020-003 Expenditures in Excess of Amounts Allocated in the Levy Coal Severance TaxRepeated
