Audit Committee - Regular Meeting

All right. So, we we live now. Yes. All right. Um Well, okay. I call our meeting to order. This is the audit committee, C County. Um, first item on the agenda is approval of the agenda. So, do I hear a motion? I'll make a motion to approve. Second. Okay, we've got a motion and a second. All in favor say I.

I approved. Um, approval of the minutes for the June 3rd of 2025. Everybody had a chance to look at that. I'll make a motion to approve. Second. Okay, got a motion. Second. All in favor say I. I. Um, okay. First, uh, order of business is election of officers. I hear a nomination for chairman.

I'll make a motion for Mr. Gary Hunt for chairman. I'll second that. All right. Motion and second for chairman. All in favor say I. I. Okay. I'll pass. All right. So, we got next item on the agenda is review of prior year's audit conducts. Okay. And I think we only had two. I think we had one, right? Prior prior year. That may be confusing. Is this 24? Oh, you mean

if you go to the next page, it's the one. Yeah. The prior year, prior prior year. Now, prior prior year. Yeah. Okay. And that was the one about the competitive bids. Yeah. But that's been they've changed the law, TCA law now where you can use cooperative cooperative purchasing agreements. Okay. Okay. But those those were were not repeat findings. No. No. No. No. No. Okay. So, so those were last year's were corrected, right? Yes. Yes.

Okay. We're always a little bit behind. Yeah. Um Missy, you got any questions about that? No, I understand that one that we went that 2024. Yeah, we went through that last year. Linda, you got good.

Okay. All right. The next item then is discussion of the findings for the the most current audit that we have, which is June 30, 2025. And we have two findings. one on the school board and one on the mayor's office and let's see and we got a representative school board. Do you want to explain or respond your response?

I can. So we um we bid out paving project at the high school. It was new pavement to go in back behind our CTE building. Um we went back and looked at um numerous paving projects. When we when we discovered we got the finding, we went back years and looked at how paving projects were done because our person who took that position, he just kind of followed suit with whatever person in front of the person before him did. Um the auditor said that we should have gotten a performance bond because paving could be considered construction. Um when we went back and looked at prior years, we have never had to get a performance bond for for paving. Um and so we know now that we will continue we will do that in the future. But as and we know that performance bonds are very important as far as as the um ensuring financial responsibility for money for the school district and the county taxpayers. But we did not just to make you feel better about what we did. We did not give payment to the contractor until we knew the work was complete and that um it was done of quality. And so we safeguard we safeguarded the funds even though we did not get the performance bond. And so we know we've made some internal control um structures in our department that we do not issue a purchase order for anything that requires performance bond until we get all the information from the contractor from going forward.

Was that policy before? Has it always been policy that you you should get the performance bond? So it says construction projects require performance bond definition over I think over $100,000 for fire requires a performance bond and we've just never considered paving I've always been told it's maintenance. Yeah. Paving is maintenance. You don't even put it in the fixed assets. And so it's paving that you're redoing or Yes. Yeah. It's not new. It's not new. But if it's new then I guess That's what they're considering construction. It's new pavement. Well, was that new? Was that new?

It was behind the CTE building, so I think majority of it was new. Okay. Well, that's the difference. New parking lot, but it was um that addition that we did back there that needed it was all gravel and we had students parking there. So, we on gravel that that would be okay. So, we just failed to know that was construction and we didn't get a performance bond for it. Um, and that's what we that's what our finding came from. Well, normally you think performance bond is contractor gets halfway through the job and pulls and vanishes. You know, think that'd be kind of hard to do on paving. We typically with projects like that, with paving projects, we typically hold the whole payment back, right, until they complete the project.

And we don't even make partial payments for something like that. So, we we held the entire payment for the project. It's not a lengthy process as construction of the but we realize that we will we will any paving projects we do in the future we will follow the same as construction projects and we will require all that documentation from our contractor before we issue a purchase order. Okay. Okay. Well that's that's really I guess all you can do is a corrective actions on that. I mean the project was done very well. There was no issues with it. We had no issues with the contractor. So,

we don't there's no we weren't at we were at risk, but we weren't really at any risk other than just getting the performance bond from the contractor. Okay. How how much the same question? I think it was $272,000 is what the that project was for. Yes. $272,000. Okay. What would the performance fun have cost you? Um it wouldn't have been us. So, the contractor would have went and got it. So, I'm not sure how much that would have mattered. Okay. And a lot of times um the the contractor will do a um change order to us if we were like if we tell them, "Oh, you've got to go get this because it costs them money." So, a lot of times we pay for it anyways for them to go get that performance bond. You

do a change order and you wind up paying for it. Yeah. And so, you satisfied? Yes, sir. We fixed it going forward in their policy. next time they know to do it. That's I feel like that's all she can do. We've made a checklist for anything over $100,000 to make sure we have all the documents we need before we issue a purchase order. That sounds familiar. And I provided training to my staff and and admin and the central office so they know the proper procedures. That's good. All right. Talk to my staff.

The uh Okay. The the next finding was the mayor's office and since you know more about that the mayor does I for the details.

Okay. So this is regarding the county animal shelter project that was approved by the county legislative body on March 11th, 2025 and it is fully funded. The funding is not from any county taxes but from private donations and proceeds from county land sales. Furthermore, the project is being accounted for in a capital projects fund where formal budgeting is not required. Uh secondly, an improved change order was posted to the project's purchase order before the prior year end was closed causing the overage even though a July posting date was used. So that's what created the overage and the expenditure line was uh posting the change order that was unsuitable soil. we had to we knew we were probably going to have to do that and uh when it so typically if it's a July date it doesn't affect the prior year but it but it did um after I did some research I found out that if your fiscal year is still open

and it's a purchase order it's going to adjust the balance on the prior year. I don't know if you've had that situation even even though you're with a July date. Yeah. Yes. Interesting. Yeah. So um just because the year is still open that that's supposed to

but um irregardless I knew that we didn't normally have to it wasn't required to have a budget. It was capital projects. Uh it was a purchase order. We weren't paying for anything yet. We were just getting the uh change order approved and signed. you know, the mayor signs the change orders, right? So, that'll happen. So, um in the future, you know, I know that um if that was to happen, I would adjust it adjust it back off and we closed. That's not really a requires a policy change or anything.

No procedure. Just um it can't be over nothing be over budget, right? if if it's a purchase order or or what this situation is. So, but but understand neither one of y'all the auditor discussed it before they left. No. No. And I've never had that experience before. I've usually talked through some things with the auditor and tried to understand and supposed to be doing audits when I was doing you you always you know you have a little conversation about it.

It's it's it's usually we're almost it's not necessarily I got you moment but you sometimes you're you're you're almost apologizing that you're finding a fighting plus you're looking for their response depending on what it is. I mean you do have glitches in your software and and human error. Oh yeah. Things happen but it was very um surprising that I got the email and sign it and go on. I mean we didn't have it but I was never asked if we had it. I was just he I guess he expected me to provide the document.

You wouldn't normally be yet. They'll go through your books and look for it. Well, he did, but I never got asked, "Hey, this is missing. Do you have it?" And so, it was It was odd. It was odd. You just had it here to see if he was actually going to ask for it. Yeah. Yeah. Because if I had had it, I could have given We could have discussed I didn't have it, but obviously we could have discussed it and it would have been helpful to talk about it before. Well, I don't know if that's But those auditors aren't working now. Oh, we still have them. I mean, the one I have her auditor now. I think I have I think we flip-flopped. They did. Oh, okay.

You've got the one we have. I've got T this year. He's the one said about projects fund. We have I mean we've had had him come in and talk to us before, but if it's it's the same it's the same uh manager. Is it Steve Reer? Reader from Coop. Yes. Yeah. And then we have a different they call I guess this person's over the the field auditors. Um we have that was the lady that's retired but she's come back to do our county. I contacted um the auditor,

the audit senior, and the audit manager and let them know the night that I received the email that I have no idea that I was not aware of their respondings. And I'll say no one responded. No one no one followed up with me. Um because I wanted explanation and I did not get any. Usually there'd be an exit interview. Well, there was, but that he was coming to do that. He sent me my findings before that the night before and then was coming to do the exit, asked me, sent me the documents that night and said, "Can you please print these for the exit?" And that's when I found out I had an audit finding. That's the same thing. And so,

but in the exit meeting, you didn't get to talk about it. No, they wanted it signed beforehand and then um we kind of went I did email the uh that one lady that was over it and asked that and told her, "Well, when did this happen?" Yeah. Um and yeah, and that I didn't know about it. The whole thing is gone. Okay. Well, going forward with this year's audit, let's pay attention to that and and and let let me know if that happens again.

Maybe we need to go up a notch. Mhm. talk to him about that because they'll at least give you Yeah. opportunity to explain it and think it over. You know, you can't remember every single transaction you can. You know, in the past, we've I've always that's always been the case. Um the auditor will come in and say, "Okay,

I've found this situation. Tell me why you did tell me why you did this." and I was able to provide I don't maybe I ask his boss or someone else on guidance and that's the guidance they gave me or the state department gives me guidance on how to handle things and I was able to provide that and they were they were happy with that explanation I've never been I've never had not had a chance to discuss yeah it's not fair to be blindsided no and you know I just had issue with the fact that I've had, you know, things that were over budget before

in capital projects moments, like I said, 8,000 and it wasn't an issue. And if it's going to be an issue going forward, normally they would say something. I like, oh, okay, you know, no problem. We'll get it fixed. Because I had a budget amendment at that last June meeting already for this project. You know, if I'd known that, I would have say, "Hey, I need to include this in here. Can you amend the budget amendment that I already have?" I just don't ignore stuff like that. I don't know. It was It was a Well, it was very

Well, I think you you guys have done a good job. I guess it could be worse. We're still a lot better off than we were several years ago on the number of findings and the seriousness of findings, I think. So, we don't like them. We obviously we don't want them at all. This is No, we realize that. I'll say in my probably 25 years, this is my very first one. So, this one was hard for me. Right. Oh, yeah. I mean, you you take it so personally, especially when you don't you don't even know about it. It's just get an email. That was impersonal, too. Yeah. Very impersonal, right?

And I've had the same auditor for 20 years. And then I think the countyy's lucky. We've got some good employees in charge. Thank you. I feel like if this is all that was in the audit, right? Yeah. I'm not not sure they weren't stretching. Yours I feel like was just a Well, I would have didn't know. Yeah. And you corrected that. So for the future, so and you you also you've already did your corrective plan. It was overage of basically from the day.

Well, she could have almost fixed it if they'd have brought it to her. Exactly. It didn't It didn't They would have asked you to explain. Didn't necessarily need to be a finding. I agree with that. They were stretching something. I think so. Y um done with that one. Any other business? Miss, you got anything? No, sir. Complain. Nothing to complain about. Uh not right now. Suggest. Linda, you got

Mary, have you got anything we need to know about or coming up? No, the auditors on site already. They done started doing some preliminary work. For you, too. Lots of emails. Yeah, I've gotten one email from apparently we're first. We are very first. Okay. that I feel like we only got what maybe a month maybe a month break and then they're back. Oh good. So yeah, they're back and they're emailing and asking. I can only close as quick as I can. Yeah,

but you close then you have all those other schedules you have to do. So all right. When will they be back? We don't know. They just kind of show up. They Okay. I ask common I ask for courtesy because we don't have a lot of room over there and so I usually make them tell me when they're coming so I can make sure I have a place for them. They don't always do that though. Get your shipping container. I saw those sign for sale. Thank you for both for yours and Marian's hard work because I can't imagine handling a budget that

that large that both you all have. It's not easy. It's not, you know. Well, we work together pretty closely. We help each other. So, I'm really glad I have her to lean on. Yeah, she does. She does an excellent job. I mean, I feel like the part I like him on my job. I mean, I like talking to people and explaining things and why we do what we do. And, you know, and if you can do it a different way, you know, we try to try to do that if we can. Um, you know, when you have $20 million worth of projects, you have the same staff and you got federal money thrown in there and that's all different.

It's a lot to general public doesn't realize how difficult it actually and it's really I noticed that there are no findings that pertain to grants, federal money. So, that's really really good. Yeah, we have about 10 to 12 federal grants, about $15 million every year, and then we have our general fund. So, and then I have 10 schools as well that I have to manage.

That I think it's really good that you have no findings that relate to the federal money. Yeah, we I mean, you know, try to make sure all your audit schedules done, all your grant schedules are done, everything's in place, you get all your remittances in line and make it as easy as possible. What kind of task that is and it's not easy. It is can be overwhelming. Plus, you got to run your office, right? Yeah. All right. There's nothing nothing else. Make a motion to adjurnn. I'll make a motion to adjourn. I'll second.

All in favor say I. I. Thank you all for coming.