Beltrami County government cost $52.9 million in 2008, but property tax dollars paid for only $15.4 million of it.
And most of the costs -- 34 percent -- went to human services spending, according to an audit report for 2008 released last week.
"There were no legal compliance issues," Doug Host of LarsonAllen LLP, the Brainerd firm that did the county's annual audit for the year ended Dec. 31.
"There were a couple little bumps with health and human services," Host said. But he added that half the adjustments of the prior year were found. "It's certainly going in the right direction."
Of the $52.9 million in county government activities, $8.5 million was paid by users of the services, $24.2 million from federal and state government subsidies in grants and contributions and $20.2 million from county and state taxpayers, according to the audit.
Of the $20.2 million, $15.4 million comes from county property tax dollars and $5 million from state aid.
Behind human services spending, 17 percent is spent on general government, 16 percent on public safety, 14 percent on highways and streets, 6 percent on sanitation, 5 percent on health and the remainder on smaller services.
The total cost of services was up from $50.6 million in 2007.
The county's net assets at year end was $124 million, up 6 percent from year-end 2007's total of $117 million.
Auditors each year are to test certain federal programs for compliance, he said, with this year's test involving state administrative grants for the food stamp program, Temporary Assistance for Needy Families, child support and social services block grant programs, and Medical Assistance.
"No audit findings relative to the major federal award programs for the county were disclosed during the audit," the report states.
A material weakness cited by the audit is recurring but happens due to the nature of a small county, Host said. The county was cited for segregation of duties in county departments where the same employee handles billing and receipts.
Some departments with few personnel find it hard to assign different people, but the auditors want commissioners to be aware of that issue.
"If additional segregation is not possible, we recommend county management implement some oversight procedures to ensure the internal control policies and procedures are being implement by the county staff," the report states.
"No issues come to light" of any problems, Host said, "but it's always good to be aware of the potential."
Cited as an audit adjustment is the need for the county to establish and maintain internal controls for the proper recording of all the county's accounting transactions, including account coding and reporting of accruals and net assets.
During the course of the audit, auditors proposed material audit adjustments for recording of accruals, reclassifications to the proper accounts and noted disclosure preparation. Listed as a cause for the problem is that the county has a limited number of personnel.
"We recommend county management and financial personnel continue to increase their awareness and knowledge of all procedures and processes involved in recording transactions, accruals, and reclassifications and develop internal control policies to ensure proper recording of these items," the report states.
The report also cited that collections be deposited on a daily basis to improve internal controls over cash, but Host said that auditors realize that small departments that take in $10 or $20 on a daily basis won't be going to the bank each day.
County Auditor-Treasurer Kay Mack said there is a policy in place and that there have been no problems.
In an odd finding, auditors discovered that during testing of cash and investment accounts, it was discovered that another organization was using the county's tax identification number.
Mack said it was a bank mistake, that an organization with "Beltrami County" in its name was deposited as a county transaction. Banks have been instructed to post more carefully, she said.
"Once again, the audit went extremely well," Mack said. "I am very impressed with the professionalism of the county departments involved in the audit and want to commend them."
Both Host and Mack cited JoDee Treat for her work with auditors in preparing the annual statement. "There are very few counties that compile their own financial statements without sending it off to a CPA firm and JoDee deserves complete credit for us avoiding that cost," Mack said.
Among other findings:
- Beltrami County's fund balance can keep government afloat for 6.3 months, down from 8.6 months in 2004. It was noted that reserves have been used to building new county buildings, saving taxpayer dollars.
"The state auditor targets five months at least," Host said. "It is your intent to keep that very strong,"
- Because of the building program, net assets have climbed from $97 million in 2004 to $124 million in 2008. Total capital assets have grown from $75.5 million in 2004 to $109 million in 2008.
- Long-term liabilities climbed from $16 million in 2004 to $21 million in 2005, but have since declined to $18.5 million in 2008. Most if it, $17.8 million, is in revenue bonds.
- Growth in government has been 13 percent from 2004 through 2008, or about 2.5 percent growth a year. In 2008, revenues were $58.2 million and expenditures $59.86 million. For the five-year period, only in 2005 did revenues outpace expenditures. The largest gap was 2006, with $55.3 million in revenues and $62.3 million in expenditures.
- Taxes have grown 16 percent over the five-year period: $14.2 million in 2004, $15.15 million in 2005, $14.8 million in 2006, $15.58 million in 2007 and $16.4 million in 2008. They account for 26 percent of total revenues.