Davison County audit rife with problems
State Auditor Toby Qualm on Tuesday reviewed numerous violations of laws and accounting practices turned up by an audit of Davison County's operations and finances.
Davison County Auditor Susan Kiepke said later that she does not believe the audit was a bad one, but Commissioner Gerald Weiss differed.
"I'm not happy with it," Weiss said. "Personally, I don't think it's a good audit. We seem to have the same issues coming up every year."
Weiss said he will be out of town for several days but hopes to bring his audit concerns up at the next meeting. Tuesday's review was conducted during the commission's regular weekly meeting at the courthouse in Mitchell.
Among the findings in the report was that county had not been reconciling the Motor Vehicle Fund to ensure that all funds received were paid out at the end of each month. That resulted in a $4,500 vehicle fund balance at the end of 2012.
That finding referred to practices under a prior administration and the situation has been corrected. Funds are now being reconciled monthly and there is no leftover money, Treasurer Christie Gunkel said Tuesday.
The county had not been reconciling the Flexible Spending Fund for employee benefits with the benefit amounts paid out to individual employees. The fund, said the audit, appeared higher than necessary. Auditors recommended setting an amount for the fund and transferring any extra to the general fund.
Also, tax increment financing district debt service expenses weren't published in the commission minutes, a violation of state law.
Other violations of accounting laws and regulations included:
• The county improperly spent $309,964 in restricted secondary road funds and did not maintain an adequate fund reserve. Secondary road funds at the end of 2012 should have been $412,163, but the available cash balance was only $102,199. The money, according to the audit, was used for activities other than secondary roads, a violation of state law.
• The undesignated balance of the General Fund exceeded the amount allowed by law by $521,535 on Dec. 31, 2012. According to state law, money not designated for specific uses can't exceed 40 percent of all general fund appropriations. The county was supposed to retain no more than $3,061,708 of unassigned funds. Instead, it had $3,583,243 on Dec. 31. This is the second consecutive year this has occurred, wrote Qualm in his report.
• In a repeat violation, proper reconciliations of the sheriff's and jail's checking accounts were still not being performed.
• The treasurer, sheriff and county jail did not return unclaimed property to the state treasurer -- a violation of state law. Sheriff Steve Brink, who took office in January, said he was not aware of the problems, but he will look into them. "If we're doing something wrong, we'll fix it," he said.
• The county paid $126,891 for gravel in 2011 but only $113,491 was bid. Since the total was more than $25,000 -- the amount that triggers a need for competitive bids -- auditors recommended bidding all similar purchases in the future.
Loader deal questioned
Kiepke said a check with Deputy State's Attorney Jim Taylor determined it's unlikely a North Dakota bid can be used as the basis for the lease-purchase of two, $275,000 CAT front-end loaders from Butler Machinery of Sioux Falls. The two machines are sought by the county Highway Department.
In his sales pitch last week, Butler representative Matt Tobin assured Davison's commissioners that since his company is licensed to do business in both states that purchasing off a North Dakota bid is permissible.
Taylor said the deal sent up two red flags for him.
"South Dakota law says you can purchase equipment off a bid that was bid competitively in the past 12 months from any government agency," Taylor said. "But does that law include governments outside South Dakota? That concerns me."
The four motor graders the county will purchase from Butler Machinery under a similar lease-purchase plan are OK because they meet state bidding criteria, Taylor said. The graders will be purchased off a competitive Spink County bid within the 12-month window.
Secondly, said Taylor, "South Dakota law is abundantly clear that equipment has to be competitively bid, and I don't know if that was the case with the front-end loader deal in Walsh County, North Dakota.
"These are all things we need to clear up."
In other business Tuesday, the commissioners:
• Approved, at the recommendation of Treasurer Christie Gunkel, the formation of a committee to investigate licensing golf carts for use on city and county streets. The committee includes Gunkel, Mitchell Chief of Public Safety Lyndon Overweg, Sheriff Steve Brink, Commissioner Randy Reider, Mitchell City Councilman Phil Carlson, Auditor Susan Kiepke and golfer Tim Herll. No time was set for the first meeting. "I'm not as concerned about golf carts as I am about drivers," Commissioner Denny Kiner said.
• Set the time and dates for the readings of the new county drainage code. The first reading will be held at 9:30 a.m. on Aug. 20, and the second reading at 9:30 a.m. on Aug. 27. Kiner, a member of the drainage committee, said the last ordinance change was made in 1987. The draft ordinance is available on the county website www.davisoncounty.org, under "drainage agenda."
• Approved a request from Director of Equalization Kathy Goetsch to allow staff member Kristy Elder to attend courses to become a trained appraiser. "We always seem to be short of assessors," Goetsch said. The cost of the course will be $400.
• Approved a request from State's Attorney Jim Miskimins to cover the cost of meals for Deputy State's Attorney Bob O'Keefe as he attends upcoming Drug Court training in Sioux Falls. The cost of the training and transportation mileage will be covered by the Unified Judicial System. The court, which will come online this September, will offer intensive supervision to selected offenders in lieu of jail time. Judge Timothy Bjorkman will be in charge of the Mitchell Drug Court.
• Authorized, at the request of Miskimins, the release of a lien on property in Beadle County.The property lien was filed by Davison County to secure $2,200 in indigent medical expenses and court-appointed attorney fees in Davison County. Beadle County subsequently acquired the property and discovered Davison County's lien. Beadle County will donate the property to a public project without remuneration. The agreement does not cancel the debt owed to Davison County, Miskimins said.