Audit outline calls for changes

Auditors questioned a lack of segregation of duties in the treasurer and tax claim offices.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- Lawrence County's annual audit found problems including missing financial reports, late payments, questions about bids and a lack of checks and balances in several offices.
A draft report prepared by Maher Duessel, certified public accountants, was recently given to county officials. The final report is due in the next few months and changes are expected.
County Controller Mary Ann Reiter said most of the audit recommendations involving her office have either been corrected or explained to the auditors.
The report contends that Reiter hasn't filed annual financial reports with the Pennsylvania Department of Economic Development since 2000 and the county prothonotary's office since 1999.
Similarly, the report stated that the county controller is required to publish a concise summary of the financial report in a local newspaper, but none has been completed for the last three years.
Quotable
"I was very lax about getting them done," Reiter said. "There was no excuse for not getting them done. They are completed now."
The reports have been sent to the state and are now on file in the county prothonotary's office, she said.
Reiter said she did not publish the reports because she did not think they were sufficient for people to read. She said she instead mailed them out to other counties, which is an alternative allowed by law.
Reiter said other counties also mail their financial reports to her instead of advertising.
Other findings relating to Reiter's office included numerous instances when there was a time lag between the date of an invoice and the date of payment exceeding 30 days. The report said that there were several instances when the date of invoice and the date of payment exceeded 60 days.
Reiter said she is required to pay the invoices 30 days after they are received in her office. She said some departments hold the invoices before sending them to the controller and she has no control over how long they are held at those offices.
Recommendation
The auditors report did recommend the county try to eliminate the delays.
"Delaying payment to legitimate vendors can lead to a loss of competitive pricing for the county by limiting the vendors willing to deal with the county," the report said.
Auditors also found that there were no purchase orders supporting payment for 28 invoices.
Reiter said those are "drawer payments" or monthly or quarterly payments such as salaries to attorneys or regular bills such as utilities. There are contracts supporting those payments, not invoices, she said.
Maher Duessel also found that there were instances where the lowest bidder for a county job was not chosen and no explanation was put in with documents.
Reiter said the only instance she recalls in which county commissioners did not pick the lowest bidder was a contract for land title work with an area law firm. She said that was a professional service that did not need to be put out for bid.
Auditors also questioned a lack of segregation of duties in the treasurer's and tax claim bureau offices, both overseen by county Treasurer Gary Felasco.
The same person has the ability to collect, receipt, record payments, make deposits and reconcile bank statements. Auditors suggest they segregate those duties as much as possible. The same person has the ability to change and delete balances in the system, according to the report.
"The county just can't afford that number of employees," Felasco said. There are six employees in the treasurer's office and two in the tax claim bureau, he said.
No policies
Auditors also point out that there are no written policies and procedures that dictate the process for delaying tax sales for property owners. Maher Duessel recommended the county put a policy in place.
Felasco said his office follows Pennsylvania real estate tax law. He said they talked about putting in more stringent local procedures, but his solicitor told him it wouldn't hold up in court if challenged.
Maher Duessel also reported that there is no documentation that the bank reconciliation book balance agrees with the general ledger cash balances, and there were several instances where numerous accounts are not reconciled at all.
Felasco said he is unsure what the accountants are referring to. He said all accounts in his office have been reconciled and are balanced weekly between the treasurer and controllers offices.
cioffi@vindy.com