Below is the letter attached to the 2019 Audit for the Calhoun County Commission which provides a summary of the findings and the response from the Calhoun County Commission. To read the complete audit with all financial information and audit details following the link below.
The letter from bhm cpa group, inc. was copy and pasted without any changes. While typos are not uncommon on the Ridgeview, all errors in the letter are not our responsibility.
To the County Commission:
We have audited, in accordance with auditing standards generally accepted in the United States and the Comptroller General of the United States’ Government Auditing Standards, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Calhoun County Commission, West Virginia (the Commission) as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the Commission’s basic financial statements and have issued our report thereon dated April 19, 2022.
Internal Control Over Financial Reporting
As part of our financial statement audit, we considered the Commission’s internal control over financial reporting (internal control) to determine the audit procedures appropriate in the circumstances to the extent necessary to support our opinions on the financial statements, but not to the extent necessary to opine on the effectiveness of the Commission’s internal control. Accordingly, we have not opined on it.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, when performing their assigned functions, to prevent, or detect and timely correct misstatements. A material weakness is a deficiency, or combination of internal control deficiencies resulting in a reasonable possibility that internal control will not prevent or detect and timely correct a material misstatement of the Commission’s financial statements. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings that we consider significant deficiencies. We consider findings 2019-001 and 2019-002 to be significant deficiencies.
Members of the Board
Calhoun County Commission
Independent Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Required by Government Auditing Standards
Compliance and Other Matters
As part of reasonably assuring whether the Commission’s financial statements are free of material misstatement, we tested its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could directly and materially affect the determination of financial statement amounts. However, opining on compliance with those provisions was not an objective of our audit and accordingly, we do not express an opinion. The results of our tests disclosed an instance of noncompliance or other matters we must report under Government Auditing Standards which is described in the accompanying schedule of findings as item 2019-003.
Commission’s Response to Findings
The Commission’s responses to the findings identified in our audit are described in the accompanying schedule of findings. We did not subject the Commission’s responses to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.
Purpose of this Report
This report only describes the scope of our internal control and compliance testing and our testing results and does not opine on the effectiveness of the Commission’s internal control or on compliance. This report is an integral part of an audit performed under Government Auditing Standards in considering the Commission’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
BHM CPA Group, Inc Huntington, West Virginia April 19, 2022
Calhoun County, West Virginia
Schedule of Findings and Responses June 30, 2019
FINDING NUMBER 2019-001 Significant Deficiencies – Cash Drawers
During the audit it was noted that multiple individuals work out of a single cash drawer in the various county offices. The Calhoun County Commission, Calhoun County elected officials and/or department heads do not have a system to ensure that all individual personnel are properly maintaining a separate cash drawer.
Proper internal controls dictate that a separate cash drawer be utilized by individual personnel. Failure to have proper controls in place could lead to errors or irregularities going unnoticed and uncorrected in a timely manner.
The County Commission and elected officials and/or department heads should implement systems to ensure that individual cash drawers are maintained.
Officials Response:
As with last year’s response, all offices are working oh having different cash drawers, but until then each office balances each day with the drawers. Receipts balance to transactions on a daily basis.
FINDING NUMBER 2019-002 Significant Deficiencies – Segregation of Duties
There is insufficient segregation of duties in the County. At times, the same employee of the County prepares checks, reconciles the bank accounts, records receipts, prepares deposits, collects fees, and prepares monthly reports for the respective office of the County.
Proper internal control procedures dictate the responsibility for approving, executing and recording transactions should rest with different individuals. Failure to maintain sufficient segregation of duties could allow errors and/or irregularities to go undetected without the knowledge of the County Commission.
We recommend the duties of writing receipts, preparing and making deposits, issuing checks, reconciling bank accounts, and preparing the monthly statements be segregated among different employees.
Findings Related to the Financial Statements Required To be Reported in Accordance with GAGAS
Officials Response:
Calhoun County, West Virginia
Schedule of Findings and Responses June 30, 2019
FINDING NUMBER 2019-002 (Continued)
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.
FINDING NUMBER 2019-003
During the audit it was noted 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 estimated (budget) as last revised. Specifically, expenditures in the flowing budget category exceeded the approved amount.
Budget Actual General Government $20,000 $20,691
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”
Over Expenditure
$(691)
The Calhoun County Commission, Calhoun County elected officials, and/or department heads did not have a policy to monitor compliance with this statue.
The Calhoun county Commission, Calhoun County elected officials, and/or department heads are directed to implement effective budgetary controls to insure that actual expenditures and/or encumbrances do not exceed the amounts allocated for those 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.
Officials Response:
A budget revision was prepared, however, no signed copy of the approval form the State Auditor can be located. We will ensue in the future that all submission receive a retuned signed approval.
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