Auditors find few faults with Cannon Co.

Four audit findings for Cannon County were released Tuesday, February 28 by the state Comptroller's office.

The audit was performed for last budget year, which ended June 30, 2016. State auditors found that:

The Cannon County General Fund and other special revenue (REACH program) had deficits in unassigned fund balances.
Expenditures exceed appropriations.
Some funds of the REACH program were not deposited within three days of collection.
The county did not require a vendor to comply with contract terms.

James R. Arnette, director of the state Department of Audit, released the audit.

Total expenditures of the REACH program and the Solid Waste fund exceeded total appropriations approved by the County Commission by $5,963 and $15,305, respectively.

Expenditures exceeded appropriations approved by the County Commission in the Circuit Court ($1,265) and other local heath services ($960).
"These deficits resulted from a lack of management oversight, which allowed expenditures to exceed available funds and management's failure to correct the finding noted in the prior-year audit report," said the comptroller's report.

"Sound business practices dictate that expenditures should be held within available funding," the report said.

County Executive Mike Gannon said he concurred with the finding.

"The county commission has approved a plan of action that has a goal of reaching a $1 million fund balance in the General Fund within five years," Gannon responded.

"The REACH program has had a deficit for the past four years, and we will continue to try to correct it," Gannon said.
"It became evident that the REACH program budget was overspend near June 30, but it was too late to amend the budget," he continued.

"Due to budget cuts in 2015/16, the circuit court clerk was left with no funds for postage, office supplies, etc. In order to operate the office, miscellaneous items such as ink cartridges, paper and postage had to be purchased, which put them over budget," Gannon said.

"We received two unexpected invoices in July 2016 that were for the 2015/16 budget year that caused us to exceed the Other Local Heath Services category.

"The solid waste overage was an oversight," Gannon said.

The auditors selected 60 receipts to trace deposits for the REACH program.
"The office did not deposit funds into the official bank account within three days of collection in 12 of the 60 receipts tested," the audit report said. State statute requires deposit within three days.

"Some of the REACH program sites are in remote areas of the county and it is difficult for them to get the deposits to the bank in three days. We will worked with the REACH program to come up with a better system to get checks desposited within three days of collection," Gannon said.

Auditors also found a problem with the county's agreement with Pemberton Trucking Co. to haul solid waste to a disposal site.

The original agreement called for Pemberton to provide a minimum of two road worthy semi-tractor trucks at all times and to maintain a general liability insurance policy in the minimum amount of $2 million.

"During our audit, we contacted Pemberton Trucking and were informed that the company only operated one truck," the auditors said.
A problem was also discovered in Pemberton's insurance "that the company's general liability insurance policy on file in Cannon County had expired." A new policy was enacted, but only for $1 million, which is half of the coverage required by contract.