Processing of claims remains a concern

An audit of Flathead County’s financial records has turned up a concern about how claims are processed, mirroring the same issues cited in an internal audit last year.

The Anderson Zurmuehlen & Co. accounting firm from Bozeman delivered its findings to the county commissioners on Thursday for the fiscal year ending June 30, 2009.

While the firm didn’t identify any significant deficiencies in internal control over compliance, it did find that supporting documentation, namely original invoices, were not obtained for all claims. In a sample of 40 disbursements selected for testing, auditors found five that didn’t have an appropriate invoice or other supporting documentation.

The effect of the county finance department’s lax claims process is the potential for misappropriation of assets due to payment of unauthorized claims, the audit report noted. Controls are in place but aren’t being properly used.

The county requires all departments to submit invoices with the vendor name, amount, date and description with the claim signed by an authorized individual, according to county managers. Exceptions have been payments for juror services and mileage claims for Retired Senior Volunteer Program volunteers.

Anderson Zurmuehlen & Co. accountant Stefeni Freese told the commissioners that county managers have assured auditors that all future claims will include proper supporting documentation.

Last August, Polson accountant Cindy Dooley, who contracts with Flathead County as an internal auditor, conducted an audit of selected county claim warrants at the request of County Clerk and Recorder Paula Robinson. Dooley cited several deficiencies in the way claims were being processed.

The eight claim warrants reviewed were brought to the county commissioners’ attention by former Commissioner Dale Williams, who questioned the documentation and on a larger scale the need to spend county money on items such as a boat and pickup-truck liner. Williams’ concerns came amid American Dream Montana’s accusations of lavish and inappropriate spending of public money by employees of the Planning Office.

Following the internal audit, County Administrative Officer Mike Pence said changes would be made to tighten up claims processing.

THE recent audit also noted the county’s travel policy isn’t being consistently applied by all departments.

In some cases there was no documentation when a county vehicle was available for use, Freese said. The county reimburses mileage at the going federal rate if an employee uses a personal car, but if there is a county-owned vehicle available and the employee still chooses to use a personal car, the reimbursement rate is 48.15 percent of the federal rate.

By not documenting when county vehicles are available, there’s a potential for a misappropriation of assets, Freese said, because employees can then use their personal vehicles and request to be paid the full reimbursement rate.

The audit report recommended that all department supervisors be required to approve all travel expense forms and sign a notice of unavailability of a county vehicle.

The county recently implemented a new travel expense form for reimbursement and now has a motor-pool vehicle policy in place for department heads to monitor the availability of county vehicles.

LAST YEAR’S audit faulted the county for filing late reports, a deficiency blamed on turnover in the finance department. This year the county made its audit deadline, filing financial statements “just under the wire,” Freese said.

Freese told the commissioners that county managers had satisfactorily addressed concerns.

“Management took every finding to heart,” she said.

 Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com