County audit: $600,000 unaccounted
Madison County’s borrowing ability could be impacted by an audit that has shown the Tax Collector has failed to keep adequate books as far back as 2017.
Madison County Administrator Greg Higginbotham told the Board of Supervisors on Monday that the audit could impact the county’s borrowing ability because nearly $600,000 is missing.
Higginbotham alerted supervisors to the audit that will result in a “qualified opinion,” an auditing term used to show material misstatements or omissions in a report.
“This could conceivably impact our borrowing going forward,” he said.
Higginbotham said the audit firm of Bridges, Goodman, Baird, and Clarke PLLC, discovered deficiencies in Tax Collector Kay Pace’s books going back to 2017 that has compounded over the years.
The total amount of money that is currently unaccounted for is around $600,000, he told county supervisors.
Some of the findings by the audit include:
• The Tax Collector did not reconcile bank statements in an accurate and timely manner.
• The Tax Collector’s office uses a largely manual spreadsheet for the tracking of collections and disbursements in place of accounting software. As such, the operation of the manual spreadsheet increases the likelihood of errors in opening balances, journal entries, and reconciliations. There are also less safeguards over the accounting process.
• During the course of the cash count, we were unable to tie the reported numbers from the tax collector to the source documents provided, which draws into question the accuracy of the amounts settled by the Tax Collector to the County and other external entities.
• During the course of our test work, we found that the collections per the computer system did not match the deposits made at the bank with seven exceptions noted out of the month tested.
Attempts to contact Tax Collector Kay Pace for comment were unsuccessful and she was not present at Monday’s meeting, despite being contacted by supervisors to discuss the issue.
Board President Gerald Steen said on Monday that Pace told the board she would be out of town for the meeting but she has since been in contact with outside CPA firms to come in and help clean up the mess.
Higginbotham told supervisors that the audit report was a “fancy way of saying they’re not balancing their checkbook.”
He said the issue boils down to improper bookkeeping, theft, or a combination of the two.
“I’m not lobbying allegations of theft on anyone,” he said. “Those are the only two ways the cash count gets off. Not recording something correctly or money is walking out the door.”
Higginbotham said the office’s manual spreadsheet process was rife for error.
Steen said the board has tried for years to get Pace to upgrade software.
“We have talked about this several times with the Tax Collector upgrading,” he said. “She does have the say as far as to upgrade or not. This board has been willing to look at an upgrade for that office.”
Higginbotham said that’s one of the steps needed for the future, which will ultimately require buy-in from the next Tax Collector.
Pace is not seeking re-election and her term ends Dec. 31.
As far as next steps, Higginbotham said he hoped to have an engagement letter with a CPA firm by the next board meeting, but outside of that there was nothing immediate that could be done. He said a lot of time is needed to unwind and figure out where things went wrong.