A new report from the state inspecting Humboldt County’s money difficulties supplies a clearer photograph of what led to the county’s failure to post fiscal experiences on time.
The State Controller’s Business office unveiled its report on Humboldt County’s internal controls over economic reporting Friday, getting “a backlog of journal entries and deficiency of lender reconciliations contributed to the county’s lack of ability to complete timely money stories — compounded by insufficient staffing, insufficient instruction, and a absence of up-to-date procedures and procedures.”
“We take pleasure in the perform of the Point out Controller’s Office environment to comprehensive a fair and neutral report,” County Administrative Officer Elishia Hayes stated in a statement. “I would like to realize county staff members and the board for their attempts to address the fiscal worries we have skilled as their get the job done is appreciated and has not absent unnoticed. We are committed to keep on making necessary improvements and will assistance the new interim Auditor-Controller in building a extensive action program to address the suggestions explained in this report.”
Humboldt County has been delinquent in distributing its fiscal reports for the past two decades and the County Administrative Office, many division heads and supervisors laid the blame squarely on the shoulders of previous Auditor-Controller Karen Paz Dominguez.
Even so, the report uncovered the predicament was far more sophisticated and the accountability a lot more common.
The backlog of journal entries, for occasion, was the result of the Auditor-Controller’s Workplace originally relying on county departments to submit the entries. The policies and methods necessary the departments to submit no extra than two pages of documentation, which was inadequate detail and confined the office’s means to glance for errors, of which there were being several “including incorrect item codes for classifying transactions into distinct accounting classes unbalanced debits and credits insufficient or missing descriptions and inadequate or missing supporting documentation.”
A blend of faulty journal entries, further review of the journal entries by (Auditor-Controller’s Office environment), and unrealistic expectation of the time desired to put into practice the new strategies contributed to the backlog of journal entries,” the report states.
The county formerly relied as well heavily on exterior auditors to determine faults so the county hadn’t placed much emphasis on ensuring journal entries have been as totally free from error as probable, the report states.
In the same way, lender reconciliations were being hard to do for exterior consultants simply because of a “lack of documentation and the abundance of transactions.” The method for dollars deposits is accomplished manually and individual deposits are grouped into lump sums prior to currently being deposited at the financial institution.
“This course of action will make it tough for accountants to trace deposit quantities from the financial institution statements to the county’s data,” the report states.
In conditions of staffing, the report located the Auditor-Controller’s Office “had ongoing vacancies caused by separations, promotions, and problems recruiting certified workers to fill vacancies.” It is experienced a few team positions open on normal for two fiscal a long time and also missing two of its most senior staff.
The change of payroll to the business also enhanced the workload, but two of the 5 payroll personnel positions are vacant, forcing the Auditor-Controller’s employees to do the job on payroll alternatively of their other duties.
“It also appears that quite a few county employees users absence adequate expertise about applying the county’s economic accounting software,” the report states. ” … It is tricky to decide regardless of whether the continued need for further coaching was because of to staff turnover, loss of institutional knowledge, or inadequate education.”
Paz Dominguez responded to the report with supplemental context, stating her office environment was specified a list of critical functions it was limited to engaging in at the onset of the COVID-19 pandemic and that didn’t include journal entries. She extra a new total-time accountant was taken from her place of work and utilised to personnel the Crisis Operations Middle complete time.
“Additionally, the Board of Supervisors and its CAO chose to push for the completion of two diverse tasks inspite of remaining faced with an unparalleled pandemic and minimal staffing levels,” Paz Dominguez’s response states. “These two assignments ended up the now-failed project to outsource payroll to ADP and the compelled enhance of the county’s money software. Both equally tasks demanded a major time financial investment from the A-C Office that pulled it away from its point out-mandated responsibilities and its vital capabilities.”
In conditions of bank reconciliations, Paz Dominguez also reported no evidence of bank reconciliations experienced been provided and that the county “has not experienced a real lender reconciliation for at minimum a decade.”
“At the commence of fiscal yr 2019-2020, the Auditor-Controller implemented a adjust to the procedure of recording deposits, aka money receipts,” the report states. “That alter required that deposits be recorded on the working day that they ended up truly deposited at the bank alternatively than the working day the Treasury employees prepared their batch for posting to the common ledger.”
The county response incorporated in the report was various than the 1 available Friday, reiterating what has been mentioned in the previous: Paz Dominguez was allocated the means she essential, but she unsuccessful to make the most of them effectively to get her obligations finished and created a hostile office in the course of action.
“I consider this report falls brief in describing the endeavours of the organization to tackle the challenges knowledgeable, which have brought on economic strain properly further than the untimely submitting of the Financial Transactions Stories,” Hayes wrote. “I understand it is the priority of the Point out Controller to continue to be neutral in analyzing the county’s techniques and my intention is not to discredit all those initiatives, alternatively it is to stand organization in the defense of staff members and the Board who have vigilantly served this organization and their group in an unprecedented time that has been striving to have their individual price methods.”
Paz Dominguez was unavailable for remark by publication time.
Sonia Waraich can be reached at 707-441-0504.