This blog originally founded by Blogger who holds a theological degree and a doctorate in Counseling Psychology. Taught Psychology for 32 years and is now Professor Emeritus. Is a board-certified psychologist and was awarded the Lifetime Achievement Award in his profession. Ministered as a chaplain, and pastored Baptist and Episcopal churches. Publications cover the integration of psychology and theology. Served in the Army, the Merchant Marines and the Peace Corps.

Wednesday, October 5, 2011

Inquiring Mind Asks for Audit

Inquiringmind asks us to have a thread to follow the BOE and County mandated Local Government Changes to the audited financial statements.

She writes:  "The County Manager, County Finance Director and Chair of the Commissioners met we me yesterday. Several things were brought to their attention
and some interesting information surfaced. 1) The County says that they can't afford an annual inventory. We think that they can't afford not to conduct annual inventory. They didn't know that 4 of the 5 trailers that they owned had been sold."

10 comments:

inquiring mind said...

The County is paying the insurances for the new high school while the lease calls for the Board of Education pay the insurances. We wonder if they are both paying the insurances? One thing for sure, they both could afford to spend the time to read their agreements; they spent pretty penny on attorney fees. Maybe this is an indication of why the new high school construction is so deplorable; neither of the entities read their Agency Agreement and hired a non-licensed individual to oversee the project. Pay $50,000 to oversee and $87 million project. We figure that was probably deliberate and stems from that ole County philosophy of appointments that go like this: "Lets appoint someone that we can control, a figure head so to speak."

Anonymous said...

These arrogant jerks say they can't afford an annual inventory.

And county officials have such a flippant, cavalier attitude regarding these continuing costly "mistakes".

But they can buy substantial tracts of land, give $$ millions of taxpayer money and the use of high-priced land to special interests groups and pals of Deal; make many false, exaggerated, and misleading public statements; follow a predetermined agenda that the general public is not allowed to vote on; build a $80-$90 million (and counting) high school, which still has continuing issues and problems; continues to give ASU all kinds of advantages at great cost to the taxpayers; places those taxpayers in huge, unprecedented debt; dole out considerable sums year after year to firms who call themselves professionals for half-assed work.

And the County officials say they cannot afford an annual inventory.

Again, what a bunch of arrogant and corrupt jerks!

With such an attitude, what if we tell them we are not going to pay our property taxes?

inquiring mind said...

I met with the County Manager, County Chair and County Finance Director on Tuesday to find out that they don't put much weight on getting the right assets booked much less the values. And, it came quite a surprise to find out that the Local Government Commission was weighing in earlier than expected on our request for them to check into a laundry list of errors on both the BOE and County financials. The list is of a sort that would make one wonder whether it is possible that 3 financial officers and 2 CPAs could make this many professional errors and not raise the competence and/or fraud questions.

The Local Government Commission had originally said it would take 7 weeks to investigate. And, with 5 weeks to go, we find that they have already addressed the $4.5 million booking of Mabel School by the County. The LGC contacted the County's auditor and asked them to have the County unbook Mabel School retroactive to 6/30/2010.

The Board of Education is keeping a tight lip on how they are doing with the LGC. We assume that the LGC has contacted their auditors to have the old WHS property taken off the books. However, the problems are much more serious.

The County booked the old WHS property rightfully so. They did it 2 years later than they should have and using incorrect an incorrect value and only booked the building. At this point the County and the BOE both have an F in stewardship. And, we hope that the LGC will drive that point home.

Chairman Miller thinks he could get a deferment for the Finance Director on the class I misdemeanor called for in the NC General Statutes regarding willfully withholding information from auditors. That was meant to be a joke. And, they all laughed except for me. NOT FUNNY! And, there is much much much more to be reported as the LGC digs in.

Chairman Miller was expecting a call from the LGC to explain to him the importance of proper financial reporting. Maybe she will send the County one of those letters she sent the Board of Education that threatened them being personally liable. That ought to get their attention.

Anonymous said...

Sounds like Chair Miller is falling right in line with "business as usual!"

inquiring mind said...

The LGC has responded. However, they only responded to 3 of the issues raised. And, it is obvious that they didn't look at all of the documents sent to them. We have responded to them on all 3 issues that they have addressed. In 2 of the instances, they have had the auditors adjustments in the 6/30/2011 financial statement. In remaining issue that they responded to they told us what we already knew - the 5 mobile units that the County booked as an asset were not part of the transfer from the BOE to the County. We agree wholeheartedly. However, if was booked as an asset by the County and we want to know how they plan to correct that. The other issue is the use of replacement value for fair market value vs the appraised value. The appraised value is $12.5 million (after taking out the $2.5 million that the County already had booked). The County booked $25 million plus. This is a difference of $12.5 million. Then there is the issue as booking it as a building and not considering any of he land. (Buildings are depreciated; land is not.) The LGC's response stated: "the auditors determined that the value assigned in 2010 was an acceptable approximation of fair value at the date of transfer i n 2008." I wish that I could show you the 1 piece of paper that makes up this value. Its a free for all. "We the people" are being sc...

inquiring mind said...

Something wrong with item 4 of letter from LGC. The LGC states: "The County took possession of Mabel Street School, and it is recorded on the County's books at its estimated market value at the time of the title transfer. The BOE's books will be adjusted to reflect the donation and it will be removed at the net book value."

The LGC must really be covered up. They reply to only a mere fraction of the issues raised and they responded opposite of the way this one is being handled. According to the County Finance Director at our meeting last Friday, the auditors told the County to unbook Mabel School because the BOE had a capital lease. There is so much crap in the pile that they can't get their head above it.

Anonymous said...

Correct me if I am wrong, but I get the impression that the LGC may or may not be "covered up", but instead they are more into an attempt to maybe 'cover up' for the county officials, like the LGC did in the past. It seems to me that if the LGC would have done their real job some years ago and had performed a more impartial and thorough check of the county's buying, borrowing, and building spree, the county, and more importantly, we the taxpayers, would not be in this very serious bind now.

inquiring mind said...

Anonymous. The Board ofEducation provided the County with the asset values of the old WHS that they transferred to the County. It included 5 mobile units at $161,647. There is only one mobile unit. So, the County is out $129,318. This is why they can't afford to do an inventory. This might explain why other fixtures that were installed in the old WHS building came up missing. Without controls it can be a free for all.

When questioned regarding the use of replacement value instead of most recent appraised value to book the value of the old WHS property, Chairman Miller said that the Board of Education had an appraisal and the County did not. Then it was pointed out to Chairman Miller that the replacement values came from the Board of Education.

Then Chairman Miller asked to see the LGC rules for reporting fixed assets and it was presented.

Chairman Miller continued to argue that there was not an "appraised value" at the time the asset was transferred. (May the County should have gotten one. Deal and company were claiming the old high school was worth $36 million. It was transferred to the County on 2/19/2008. The loan package was submitted to the LGC shortly thereafter. The bank loan closed on 4/10/2008. And, to really make it juicy, the asset wasn't even booked by the County in 2008. It wasn't booked until the new Finance Officer took over. Just how did all of this get past 2 auditors and 2 finance officers? We shouldn't be too surprised, it was part of doing business under the Deal regime. Bottom line. The appraised value was $15 million with $2.5 million already booked as the Smitherman Winkler Property that the County owned and the Board of Education did not own. So that leaves $12.5 million to book. The county booked $25,893,028. That is over 2x the value allowed under the LGC policy which is provided for in the general statutes - (ie more than the law allows).

October 6, 2011 7:52 AM

inquiring mind said...

Anonymous. The Board ofEducation provided the County with the asset values of the old WHS that they transferred to the County. It included 5 mobile units at $161,647. There is only one mobile unit. So, the County is out $129,318. This is why they can't afford to do an inventory. This might explain why other fixtures that were installed in the old WHS building came up missing. Without controls it can be a free for all.

When questioned regarding the use of replacement value instead of most recent appraised value to book the value of the old WHS property, Chairman Miller said that the Board of Education had an appraisal and the County did not. Then it was pointed out to Chairman Miller that the replacement values came from the Board of Education.

Then Chairman Miller asked to see the LGC rules for reporting fixed assets and it was presented.

Chairman Miller continued to argue that there was not an "appraised value" at the time the asset was transferred. (May the County should have gotten one. Deal and company were claiming the old high school was worth $36 million. It was transferred to the County on 2/19/2008. The loan package was submitted to the LGC shortly thereafter. The bank loan closed on 4/10/2008. And, to really make it juicy, the asset wasn't even booked by the County in 2008. It wasn't booked until the new Finance Officer took over. Just how did all of this get past 2 auditors and 2 finance officers? Bottom line. The appraised value was $15 million with $2.5 million already booked as the Smitherman Winkler Property that the County owned and the Board of Education did not own. So that leaves $12.5 million to book. The county booked $25,893,028. That is over 2x the value allowed under the LGC policy which is provided for in the general statutes - (ie more than the law allows).

inquiring mind said...

The footnote to the County financial statement for 6/30/2010 claims that the old WHS was booked at "appraised value". This is not the truth as we all know. And, they also state that Mabel School which they had to recently unbook was booked at "appraised value". What appraisal?

Another in the continuing issues of the County financial statement to be investigated by the LGC.