STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR PHIL BRYANT _part5 ppt

Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No.. Compliance Requirement: Special tests and provisions The Rehabilitation Policies, Procedures

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41 SCHEDULE OF FINDINGS AND QUESTIONED COSTS

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Schedule of Findings and Questioned Costs For the Year Ended September 30, 1997

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A Summary of Auditor's Results

1 The auditor's report expresses a qualified opinion on the primary government financial statements of

Sunflower County, Mississippi

2 Three reportable conditions in internal control over financial reporting are disclosed by the audit No

condition is reported as a material weakness

3 No instances of noncompliance material to the financial statements are disclosed by the audit

4 No reportable conditions in internal control over the major program are disclosed by the audit

5 The auditor's report on compliance over the major federal award program of Sunflower County,

Mississippi, expresses a qualified opinion

6 Seven instances of noncompliance relative to the major federal award program for Sunflower County,

Mississippi, are disclosed by the audit

7 The program tested as a major program was the Home Investment Partnership Program –

CFDA #14.239

8 The threshold for distinguishing Types A and B programs is $300,000

9 Sunflower County, Mississippi, was not determined to be a low-risk auditee

10 There are no prior audit findings and questioned cost relative to federal awards which would require

the auditee to prepare a summary schedule of prior audit findings as discussed in Section _.315 (b) of OMB Circular A-133

B Findings - Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting

Based on an Audit of the Primary Government Financial Statements Performed in Accordance With

Government Auditing Standards

Chancery Clerk

97-1 Finding

We noted the following weaknesses in the controls over the collection of land redemption and Chancery Clerk filing fees:

a One deputy clerk=s receipt books were missing for some time periods

b Receipts were not written for payments made by check

c Some collections could not be traced to the deposit slips

d Computer-generated receipts could be voided by any deputy instead of only deputies with

authorization to void

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The Chancery Clerk should implement controls to ensure that all fees are properly collected and accounted for Failure to properly prepare and maintain accounting records could result in the loss of public funds

97-2 Finding

Section 7-7-211, Miss Code Ann (1972), gives the Office of the State Auditor the authority to prescribe accounting systems The Mississippi County Financial Accounting Manual states that funds should be centralized in the county's accounting records The Community Development Block Grant fund was not accounted for in the county's centralized accounting records Failure to centralize all funds in the county=s accounting records could result in some funds not being included in the financial statements

Recommendation

The Chancery Clerk should comply with the accounting system prescribed in the manual by recording all funds in the county=s centralized records

Service Organization - Delta Computers

97-3 Finding

The solid waste system supplied by Delta allows edit and deletion of critical records This system requires an unaltered numbered original to ensure adequate internal control This software package can be used with or without prenumbered original documents

Recommendation

Processes that require original unaltered documents with a sequential preassigned number should be modified to allow voiding but not edit or deletion The counties using this system should use

prenumbered originals

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C Findings - Independent Auditor's Report on Compliance With Requirements Applicable to Each Major

Program and Internal Control Over Compliance in Accordance With OMB Circular A-133

Board of Supervisors

97-4 Finding

U S Department of Housing and Urban Development; Home Investment Partnership Program – CFDA No 14.239; Grant No M95-SG-28-0190

Compliance Requirement: Special tests and provisions The Rehabilitation Policies, Procedures and Guidelines for the HOME grant adopted by the county require that interim and final inspections be made on all houses that were rehabilitated with grant funds We found that some interim inspections were not performed and none of the final inspections showed that all required work had been completed Because of this, we were unable to determine if all the proper materials were used and all the required work was performed according to the contracts Recommendation

The Board of Supervisors should require that the grant administrator submit detailed documentation

of all interim and final inspections to ensure that all work required by the contract was completed 97-5 Finding

Compliance Requirement: Eligibility The Rehabilitation Policies, Procedures and Guidelines for the HOME grant adopted by the county specify that income eligibility limits are the same as those established by HUD for low income persons The annual income is determined to be the amount shown for income tax purposes for the previous taxable year On one HOME project, it appears that the income for one person exceeded the allowed amount, based on the prior year income tax return The amount that was used was based on one paycheck amount, multiplied by a yearly factor On another project, we could not read the documentation shown to verify the income of the person applying for the funds The payments for Project Number 3783200002 appear to be in violation of the grant requirements, resulting in questioned costs of $13,922

Recommendation The Board of Supervisors should ensure that the grant administrator verifies that all persons applying for HOME grant funds meet the income eligibility standards before the projects are approved Any person exceeding the income eligibility limits should not be approved to receive the funds

Questioned Costs: $13,922

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97-6 Finding

Compliance Requirement: Special tests and provisions

The Rehabilitation Policies, Procedures and Guidelines for the HOME grant require that in order for any contractor to be eligible to bid on rehabilitation contracts, he must provide a certificate of liability insurance and a Mississippi contractor=s license Based on the documentation provided by the grant administrator, one contractor had both documents for only a portion of the time period covered by the audit, and the other contractor did not have either one

Recommendation

The Board of Supervisors should ensure that the grant administrator verifies that any contractor bidding on any of the HOME projects has liability insurance and a contractor=s license for the entire time period that he will be working on the projects

97-7 Finding

The Rehabilitation Policies, Procedures and Guidelines for the HOME grant require that the grant administrator make interim and final inspections of all work performed to ensure compliance with the approved contracts The final inspection reports must be signed by the grant administrator and the homeowner We noted that some of the reports were not signed by the homeowners

Recommendation

The Board of Supervisors should ensure that the grant administrator obtain the required signatures for all inspection reports

97-8 Finding

Each contract between the homeowner and contractor for residential rehabilitation requires that any change in the contract amount or work to be done be accepted in writing by the owner, the county, the contractor and the grant administrator We noted the following deviations from the requirements:

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a Some change orders were not signed by the homeowner

b Some change orders were not signed by the contractor

c Some change orders were approved by a blanket board order instead of being approved

individually Also, the blanket board order was approved after the changes were made

d The contracts on some projects exceeded the bid amounts accepted by the Board of

Supervisors The amount of the contracts included additional costs that were in change orders that were approved before the contract was actually executed

Recommendation

The Board of Supervisors should ensure that all contracts and change orders are executed and approved in a proper manner and sequence

97-9 Finding

Compliance Requirement: Reporting

The project completion report required for each home should include the total costs for the project

We noted that the completion report for project #3783200008 did not agree with the actual total amount of funds expended for the project

Recommendation

The Board of Supervisors should ensure that the grant administrator files an amended project completion report to correct the error

97-10 Finding

Two projects, numbers 3783200015 and 3783200017, did not have the required project setup report

to verify the total amounts to be expended on these projects This caused us to be unable to verify the total amounts submitted to the Department of Housing and Urban Development for these projects Recommendation

The Board of Supervisors should ensure that project setup reports are prepared for all projects and submitted to the proper agency

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$ The findings listed below in Section D are not required to be reported under Government Auditing Standards

or in compliance with OMB Circular A-133

D Findings - Independent Auditor's Report on Compliance With State Laws and Regulations

Board of Supervisors

Section 19-11-17, Miss Code Ann (1972), prohibits the incurring of expenditures in excess of the final budget as approved by the Board of Supervisors Actual expenditures exceeded budgeted amounts in one of the funds

Recommendation The Board of Supervisors should not make expenditures in excess of budgeted amounts

Board of Supervisors' Response

We will amend budgets on all funds in the future

Tax Collector

Section 7-7-211, Miss Code Ann (1972), gives the Office of the State Auditor the authority to prescribe accounting systems for county offices The Tax Collector is required to reconcile the amount of legislative credit recorded on the Tax Collector=s cash journal to the report issued by the State Tax Commission each month Any differences noted should be documented as to the reason for the difference At September 30, 1997, there was an unidentified balance in the journal

Recommendation The Tax Collector should reconcile the amount received from the state each month to the amount shown as due from the state in the cash journal, and any differences should be accounted for

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49 This is now being done on a new computer program

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There is no authority for the Sheriff to collect Justice Court fines because the Sheriff=s deputies are not bonded to collect such fines During the audited fiscal year, we found that some fines collected by a Sheriff=s deputy were stolen from his patrol car and the money has not been recovered

Recommendation

The Sheriff should stop collecting Justice Court fines and properly account for all funds in his possession

Sheriff=s Response

I have instructed all personnel to no longer collect fine money

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