State auditors cited Boone County for inadequate safeguards against financial fraud and several instances of misuse of county credit cards and funds by county employees in a 2012 audit report released Thursday.
The Legislative Audit Division released the report during the December meeting of the Standing Committee on Counties and Municipalities of the Joint Legislative Auditing Committee. The division, which audits the financial reporting of all 75 Arkansas counties on an annual basis, also released reports Thursday on Dallas, Pulaski, Cleburne, Hot Spring, Independence, Johnson and Pope counties.
According to the 32-page audit report, which examinedBoone County’s compliance with generally accepted accounting principles in 2012, financial accounting duties were concentrated into very few employees.
County officials “did not segregate these duties to sufficiently reduce the risks of fraud or error and properly safeguard the County’s assets, because of limited financial resources,” the report read.
“It’s a very, very common finding,” said June Barron, deputy legislative auditor for counties and municipalities with the Division of Legislative Audit.
“The risk is that if you only have one employee in control of a transaction, there are no checks or balances, so there’s the possibility of fraud,” Barron said. “The problem is, in order to have appropriate segregation, you don’t have just one or two people in total control of transactions. But so often, in government, they can’t afford to do that.”
The report also cites the Boone County circuit clerk’s office for lacking an adequate disaster recovery plan, which outlines steps the county would take if it becomes impossible to conduct legal affairs from the current clerk’s office location in the Boone County Courthouse.
Circuit Clerk Rhonda Watkins, who was elected in November 2012, said updates to the county’s disaster recovery plan were completed in the months after she took office in January. Watkins said if her staff couldn’t operate out of its office, staff members would relocate to the Boone County sheriff’s office or Office of Emergency Service in Harrison if the sheriff’s office was not practical.
The report also identifiedimproper use of county funds by two employees. Betsy Lundgren, a former legal support specialist in the Boone County public defender office, used a county credit card to purchase $1,377 worth of “nonbusiness items” between December 2011 and February 2013, according to the report. Lundgren resigned Feb. 28.
Lundgren either made payments toward the debt or returned some items in the amount of $380, leaving the county with a debt of nearly $1,000, according to the report.
Barron said that although the audit report was generally limited to the county’s financial activity for the 2012 calendar year, research into specific instances of suspected malfeasance may be expanded beyond the typical one-year audit period.
“When we have that type of a finding, we expand our period,” Barron said. “We want to be sure and report all of it, if we can.”
Barron said state law required the division to forward its findings to the county prosecuting attorney. It is up to the prosecutor’s discretion whether to pursue further legal action, Barron said.
Mike Smithyman, director of the Boone County Office of Emergency Management, was also cited for improper use of a county’s credit card, purchasing $1,550 worth of items including “clothing, fuel, meals, alcoholic beverages, luggage, and other miscellaneous personal items,” according to the report. Smithyman reimbursed the county $658 and submitted an invoice for a $72 payment made on the debt, leaving the county responsible for about $820,according to the report.
Calls to Boone County Judge James Norton and to the Boone County Office of Emergency Management regarding Smithyman’s employment status were not returned.
Northwest Arkansas, Pages 11 on 12/14/2013