County hears audit results

The annual audit returned the usual finding this year that there is an issue with separation of duties within Crook County’s boards. This “significant deficiency”, said auditor Paul Stille of Leo Riley & Associates, comes down to the small size of government within the county.

Separation of duties is an internal control structure that ensures a county transaction passes by as many eyes as possible, reducing the risk of fraud.

“The county’s component units (fair board, library board and the weed and pest control district) are unable to assign a different person to each stage of the transaction cycle,” said Stille in his report.

Often times the individual who initiates a transaction also records it, reconciles the balance and has custody over the asset.

Stille explained that the danger of this does not lie in the risk of obviously fraudulent activity.

“It’s things that are hard to tell – they look legit,” he said, giving as an example an employee purchasing auto parts that are actually for their own vehicle.

“That’s why board involvement is really important,” he said on Monday, acknowledging that the commission has done a lot to encourage that behavior.

However, he said in his report, there are still issues in that department. “Board members’ limited understanding of their roles in the internal control system, their lack of experience, their lack of training and the volunteer nature of their service has resulted in an imperfect solution,” said the report.

Stille recommended that board members for the library, fair and weed and pest be made aware of the importance of their functions and provided with training on preventing and detecting abuse and fraud.

“It might be a few years since you’ve done a board training. It takes a lot to put that together,” he said.

County Attorney Joe Baron, however, said that the most recent fraud training was as recently as November, for county department heads.

Stille also recommended that board members be provided published material on fraud, that individuals with accounting backgrounds or business experience be solicited to serve and that board members who exhibit a “cavalier attitude” to their responsibilities be replaced.

The county’s response to the findings was an acknowledgement that the commissioners and members of the boards are aware of the situation, but due to small numbers of office staff have relied on compensating control by the boards. These include intensive board training, allowing board members to view accounts online and active involvement by board members in reviewing transactions prior to payment at monthly meetings.

The county is also pursuing possible alternative board training sessions.