THIS PANORAMIC VIEW of the Shiawassee County Commissioners was taken during the Wednesday, Sept. 16 Committee of the Whole meeting in Corunna.
The current board includes Marlene Webster (District 1-R), Daniel McMaster (District 2-R), Gary Holzhausen (District 3-R), Brandon Marks (District 4-R), Cindy Garber (District 6-R) and John Plowman (District 7-R). Jeremy Root is chairman of the board, with Brandon Marks acting as vice chairman. This has been the sitting board, minus one seat change when Commissioner John Horvath (District 2-D) died in March 2019.
Shiawassee County has been late completing the county audit for four consecutive years. Shiawassee County Coordinator Dr. Brian Boggs responded for a request for information via email and was receptive to a phone call discussion. Chairman Jeremy Root had not responded to an email request by Thursday press day.
(Independent Photo/Karen Mead-Elford)
Shiawassee County received a delinquency notice in August from the Michigan Department of Treasury primarily because the 2019 audit had not been submitted in time. The county has established a history of late audits for four consecutive years, starting in 2016. County finance and audit information is available on the website at www.shiawassee.net through 2018 for reference and/or review.
An audit is a formal examination of financial statements to compare accurate representations of transactions – and though there are different types of audits, the county uses an external auditing source. For the 2019 delinquent audit, the county used Rehmann, the same accounting source used by the city of Owosso, for comparison, though municipal and county budgets do differ.
The 2019 audit deadline was originally June 30. It was extended to the end of July. The second July deadline was not met. The treasury department issued the delinquency notice in mid-August. It remains inconclusive at the time of publishing when the board will address the delinquent audit.
The Shiawassee County Board of Commissioners will meet for committee meetings starting Monday, Oct. 19 with the board meeting on Thursday, Oct. 22. Agendas are generally available on the website the Friday prior.
A review of recent Shiawassee County audits discloses a number of similar (from year-to-year) noncompliance and deficiency issues. These issues have cost the county roughly a half million dollars, paid to an outside accounting firm, for a clean up process. Along with the noncompliance/deficiency problems show weaknesses in internal control over financial reporting – or issues to GAAP (generally accepted account principles). All government agencies are required to offer financial statements in accordance with GAAP. However, as stated within county auditing reports, “The County did not identify certain adjustments that were necessary for the financial statements to be presented in accordance with GAAP.” The outcome being, financial information was “initially misstated by amounts that were deemed to be quantitatively material to most opinion units. Correcting entries were subsequently posted by management to the County’s records and the appropriate balances are presented in the audited financial statements.” It has been recommended to the county for an individual review of year-end balances in the general ledger – a reconciliation of needed documents and schedules to ensure a proper financial record – possibly suggesting a need for stronger in-place, internal county financial processes. The obvious question arising from this information is why the county board of commissioners has continued with delinquent audits over four years in a row? Also, with such deficiency issues at hand, how has the county moved forward in implementing bank reconciliations and related information?
Stated within the audit report, year ending December 31, 2018, are a number of findings including bank reconciliations that were not being completed and reviewed in a timely manner, bank accounts that were not under the control of the county treasurer, a failure to file the audit in a timely manner and a failure to comply with the Uniform Guidance: a lack of formally written policies in place to cover payments, procurement and such.
In July 2019, the county offered a corrective action plan to the Michigan Department of Treasury. That action plan was submitted through the previous Shiawassee County Coordinator, Michael Herendeen. Herendeen stated, “The County will begin to develop and work the written policies related to payments, allowability of costs, compensation, and travel costs through the County Board of Commissioner’s approval process so that they are in place before the next audit. The County will assure these written policies that are put in place are in compliance with Uniform Guide.” The board of commissioners voted Herendeen in unanimously in February 2018. Prior, the commissioners had been picking up the slack since county coordinator/administrator T.J. Clark was fired in 2014 for improper use of county funds.
Herendeen was replaced by Dr. Brian Boggs on Thursday, April 16, 2020 during a virtual meeting. The commissioners voted to immediately terminate Herendeen in a 5 to 2 margin. Commissioners Jeremy Root, Brandon Marks, Gary Holzhausen and Cindy Garber voted for Herendeen’s removal. Commissioners Marlene Webster and John Plowman opposed the decision.
Dr. Brian Boggs has worked as associate director of the Office of K-12 Outreach, an adjunct professor of educational administration in the College of Education and affiliate faculty member of the Master of Public Policy program at Michigan State University, amongst other administrative and teaching positions. In a recent phone call, Boggs explained he has been in communication with the Michigan Department of Treasury, sharing that Shiawassee County, with regard to the 2019 delinquent audit notice, is not the only county “having some of these issues.” Boggs stated that Rehmann, the auditing company, was shut down for a nine-week period during quarantine, so during that time, work on the audit had stopped. Boggs said the firm did not start working remotely until after the nine-week period and they are still continuing to work from home – lending to a delay in the 2019 audit. He explained that the county has had to continuously pull information and feed it to Rehmann, though the county bid with Rehman states they would utilize the Bank Secrecy Act system (BSA), a database system they apparently did not have access to while working from home.
Boggs also mention he will soon have the new budget available for the commissioners to review. The county budget is mostly formulated from projected revenues, which are based on taxes. Most government agencies/organizations operated within a conservatively based budget – meaning projected revenues are kept tight. He wants to have at least a preliminary budget to the board in October.
Along with Boggs replacing Herendeen, Julie Sorenson was appointed treasurer in late 2019. The previous treasurer, Thomas Dwyer, had retired.