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Consent-General Government # 18.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Receive and file independent auditors' reports on the Single Audit for fiscal year ended June 30, 2015. (No general fund impact) (Newens) |
| Recommended Action |
Receive and file reports from Macias, Gini and O'Connell, LLP, CPAs, pertaining to the Single Audit for fiscal year ended June 30, 2015, including:
- Single Audit Report
- Required Communication of Auditor to the Board
- Management Letter
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| Strategic Plan Goal(s) |
| Operational Excellence |
| Reason for Recommended Action/Background |
The Board of Supervisors contracted with Macias, Gini, O'Connell, CPAs, Inc. (MGO) to conduct the annual audit of the county financial statements for fiscal year ended 6/30/15 and the Single Audit for the same period. The auditors issued their report on the financial statements, which we have presented to the Board on 7/26/16. The auditors recently issued the Single Audit report and related reports, and these are summarized below.
Single Audit Report (Att. A)
This report covers the audit of federal programs totaling $52.9 million and includes reports on internal control and compliance that lists five findings, with two categorized as "material weakness" (01 and 05) and three categorized as "significant deficiency" (02, 03 and 04) and no questioned costs:
• #2015-01: A material audit adjustment was made to record $2.5 million revenues in Mental Health in the correct fiscal period.
• #2014-02: The County financial report was issued late by six months due to countywide implementation of new financial system.
• #2014-03: The Single Audit Report was issued late due to late financial report.
• #2014-04: Eligibility verification was not properly documented in Temporary Assistance for Needy Families program and Medical Assistance Program.
• #2014-05: Eligibility redetermination was not properly performed or documented in the Medical Assistance Program.
County staff concur with all the findings and their corrective actions are included in the report. The Single Audit report was submitted to, and accepted by, the Federal Audit Clearinghouse on 7/28/16.
Auditor's Report to Governance (Att. B)
Professional audit standards require that the auditors communicate certain information about the audit to the governing board, as shown in Att. B. In this report the auditors stated that (1) All significant transactions have been recognized in the proper period; (2) Estimates used in the financial reports are reasonable; (3) Disclosures were neutral, consistent and clear; (4) The audit was delayed due to limited availability of county staff; (5) There were one material misstatement of revenues (Mental Health Fund) that was detected and corrected, and two minor items that were not corrected due to immateriality; (6) There were no disagreements between the auditors and management.
Management Letter (Att. C)
This letter offers comments and recommendations on items that were not deemed reportable as audit findings. There were no new comments this year; however, the auditors noted that during the audit period county staff were still working to address prior audit comments related to: (1) Policy on allowance for doubtful accounts; (2) Formal change control for new systems; (3) Formal disaster recovery and business continuity plan; (4) Environmental controls on computer operations; (5) Policy on access rights for users; (6) IT risk assessment. Most of these items have been completed as of this date. |
| Collaborations (including Board advisory groups and external partner agencies) |
| The County departments affected by the audits (Financial Services, IT and HHS) have responded to the audit findings and recommendations. The Financial Oversight Committee has received a status report directly from the independent auditors at its recent 8/8/16 meeting. |
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