State Auditor's Office Releases Audit of Orange County:
County Finances Not Being Managed in a Sound Manner;
Numerous Internal Control Deficiencies Noted
MONTPELIER - Finances at the Orange County Courthouse are not being handled in
a fiscally responsible manner, and poor management by the county's elected assistant judges
has contributed to the problem, according to a 32-page report released today by the Office of
State Auditor Tom Salmon, CPA.
Salmon commissioned the audit in May before he was called to active duty as a member
of the U.S. Navy Reserve; he is now deployed in Iraq. The audit initially targeted payroll
procedures due to citizen concerns about possible improprieties, but was broadened to include
a range of internal controls and financial procedures and transactions.
"We found a number of financial errors, poor procedures and controls, missing
documentation and weak record-keeping," said Deputy State Auditor George Thabault, "but
we did not find evidence of any misappropriation of assets." Questioned costs on a number of
matters totaled $7,337, some of which has already been paid back to the county.
The report noted that many problems stem from the fact that the county has not
established adequate accounting and personnel policies and procedures, and that there is a
lack of segregation of duties and insufficient review of county disbursements. (Segregation of
duties is the division of key duties and responsibilities among different staff to reduce the risk
of errors and fraud.)
Auditors noted, among other findings:
- some employee earned benefits which were not accounted for sufficiently, and
significant compensatory time ('comp time') of 213 hours and $3,648 for one
employee could not be substantiated by any documentation;
- one employee was paid for 80 hours in a pay period but only had 59 hours marked
on the time sheet; the employee was also overpaid $523 when the county paid for a
retroactive raise;
- the county did not make timely deposits of federal income taxes;
- the county incorrectly calculated accrued vacation and sick time for employees;
- the county clerk is not authorized under state law to sign checks, but signed about
25 percent of checks tested;
- the county maintains five bank accounts with the Mascoma Savings Bank, and
account reconciliations were often performed late, had significant unreconciled
differences, and were not reviewed by a supervisor; and
- county officers were not complying with several state statutes that require certain
quarterly and annual financial reports, and publication of annual financial details in
local newspapers.
Among other minor errors, auditors found that two employees did not withhold or pay
enough to cover the cost of dental insurance premiums for family members. Both have since
reimbursed the county a total of $638. Auditors issued approximately 30 recommendations to
improve policies, procedures and monitoring of county disbursements.
The business operations of Orange County government are directed by Assistant Judges
Prudence Pease and Maurice Brown. Assistant judges are elected for four-year terms by
County voters.
The Orange County assistant judges currently receive a salary of $9,500 each per year,
with health and other benefits; the county budget is approximately $700,000. All County
Assistant Judges also receive State part-time compensation at $142.04 a day for judicial duties
performed in Family Court, Superior Court, Traffic Court, meetings and trainings.
In their response to the audit, the assistant judges expressed general agreement with the
findings; they noted they have already improved procedures related to reporting state funds,
and promised to quickly implement fiscal management procedures to address the reports
recommendations.
Please note:
The full report can be found on State Auditor Tom Salmon's web site
(Click on Audits and Reports, then Special Audits.)
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