Beltrami County for the most part received good marks on its 2009 audit, but was cited for recurring problems that are difficult to correct.
The worst ranking, "material weakness," was given in the county's segregation of duties, according to the 2009 audit given commissioners Tuesday by Doug Host of Larson Allen LLP of Brainerd.
"County management should constantly be aware of the need to have adequate segregation of duties regarding the processing of transactions for the county," the audit report states. "In addition, county management should be aware that the concentration of duties and responsibilities in one or a very few individuals is not desirable from an internal control perspective."
Auditors found that adequate segregation of the accounting functions necessary to ensure adequate internal control was not in place for various county departments.
"This is typical for many counties," Host said. "You have no over-abundance of staff. What we do is recommend the county must be aware of this. It's hard to fully segregate all the county functions. Certainly here the county is aware of it."
The county also received a "material weakness" for needing adjustments on some transactions that were not rightly posted.
"As part of the audit, we proposed material audit adjustments for recording of accruals, reclassifications to the proper accounts, and note disclosure preparation," the report said.
The county's response was there is a limited number of personnel to perform such chores.
The audit firm recommended that "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 audit normally tests two federal programs for accuracy, but this year did five programs because of the nearly $1 million the county received in 2009 in federal stimulus funding that pushed several programs over the threshold for audit.
The county received a "significant deficiency" grade -- not as bad as a "material weakness" mark -- for food stamp controls.
A review of one in 25 files found a food stamp file where benefits were given to an ineligible client because the proper income verification was not in the file.
In response, the county will implement new procedures for the periodic review of case file information to ensure proper documentation is retained.
In another deficiency involving the food stamp program, a six-month income verification had not been done, and a client received $1,200 in benefits to which they were not entitled.
The county's periodic review of cases will also include that documentation, the report stated.
The county received an unqualified tag for its audit, meaning it was a clean audit with no problems in constructing it, Host said.
He gave Beltrami County an A-minus for its fund balance, only because of the continuing uncertainty of the economy.
The county at the end of 2009 had a fund balance capable of paying the county's bills for 8.04 months, up from 5.88 months at the end of 2008. The state recommends at least five months be retained.
"For the first time in five years it increased," Host said. "You've held tight reins on the expenditure side. The county's fund balance is still strong."
"We've played it pretty close to the vest here," said Board Chairman Jack Frost.
Long-term liabilities continue to decline from a high of $20.9 million in 2004 to $16.7 million.
County revenues come in property taxes and intergovernmental payments, mostly, Host said.
Property taxes accounted for 28.5 percent of county revenues in 2009, while intergovernmental revenues were 50.6 percent. That compares to 2004 with 30.6 percent of county revenues coming from property taxes and 43.8 percent from intergovernmental revenues.
The boost in intergovernmental revenues comes from the $1 million the county received in federal Recovery Act funding, he said.
Total county revenues for 2009 amounted to $59.53 milliohm while expenditures stood at $53.2 million.