Seward County officials approved their official 2024-25 fiscal year audit report March 31, but not without revisiting questions and clarifications about the Seward County Sheriff’s Department’s issues with the U.S. Department of Treasury.
Martin Schildt of GBE, CPA in Seward, presented the 60-plus-page audit to the commissioners at their regular meeting and noted five areas where the county could improve – two general finance items that have been mentioned in previous audits, and three involving revenue, expenditure and inventory practices in the sheriff’s office.
Nebraska requires each county to have an annual audit, and findings are filed with state and federal offices.
County Commission Chair Misty Ahmic said in a later interview the findings related to segregation of duties and financial reporting are understandable but “pretty standard findings for most counties.”
The issue lies in county staffing numbers. With minimal staffing in some departments, the same person could take a payment at the counter and process it in the records as well as deposit it in the county’s accounts. In larger offices, such duties would be segregated.
“It is totally a fair finding,” Ahmic said. “But at the same time, there are other things in play.”
County size a factor
Ahmic said like other counties, Seward County utilizes multiple offices and review instead of additional personnel.
The Seward County Treasurer’s office oversees revenue deposits and receipting, the Seward County Clerk’s office oversees the county budget and expenditures made, and all expenditures are reviewed by the Seward County Board of Commissioners weekly.
The auditor described the findings as “material weaknesses,” or deficiencies in internal control that limit the county’s ability to prevent, detect or correct a misstatement or error “on a timely basis.”
Seward County Treasurer Jacob Zlatkovsky said 90 of 93 Nebraska counties could deal with these issues due to their staff size.
“We do have internal practices and policies to alleviate separation of duties as much as possible,” Zlatkovsky said. Those include check-off lists and reviews for many processes.
The situation is similar for auditor comments on the county lacking staffing or knowledge to create financial statements.
Zlatkovsky said while county records are maintained in the offices, auditors usually come in and create financial statements from the records. The county then takes ownership of the financial reports that are submitted to the state after the audit.
As noted in the auditor’s comments, changing that could involve additional training for staff or additional staff positions being added.
Board manages compliance
The audit noted that county management is responsible for making sure all departments comply with requirements and processes.
Ahmic said that responsibility spans county government.
“I would not say weakness,” Ahmic said of such oversight, but noted improvement is always possible. “Ultimately it is the board. We say yes or no to the claims.”
At the end of the day, Ahmic said, the audit points out areas for improvement and that is why audits are done.
“We are stewards of public dollars and I think it is important that we take these things seriously,” she said.
Vance reports actions
Seward County Sheriff Mike Vance provided written responses to the auditor’s comments that are included in GBE’s document; most noted what has already been done or explained.
The audit noted the issue of the Seward County Drug Interdiction program’s discrepancy on federal reporting for reimbursements related to documenting services by officers assigned as school resource officers.
Vance said the department removed salary expenses for those officers from the disbursement programs of the U.S. Departments of Justice or Treasury effective in the current fiscal year.
These disbursements come through the county’s involvement in seizing cash or other items from individuals stopped for possible infractions where drugs trafficking or other criminal activity may be involved. Some of the cash and items seized are submitted to the two federal departments, and the local department receives some cash in return in the “equitable sharing” program.
The auditor indicated the department should keep detailed records of how those officers work with the schools, the time spent on school-related duties and when they are assigned to other departmental duties.
The audit also noted incidents when the sheriff’s department had not remitted fees it collected to the county treasurer’s office by the 15th of the following month as state law requires and needs to assure supervisory review of the process is occurring.
Vance’s response indicated his staff would receive additional training in this area and would continue to work to deliver the fees with a 15-day turnaround.
The final audit item related to the sheriff’s department involved inventory management, a topic the department and commissioners have discussed and which a separate audit of the interdiction program covered, as well.
Auditors recommended the department strengthen its inventory controls to maintain records of all items, periodically review items that are not in use, and insure that payments are not made for items prior to the county’s receipt of the goods without specific approval.
Vance’s comment indicated additional training in this area would be provided.
