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Auditor reports problems with county treasurer’s office accounting practices

By Ralph Echtinaw

Although no one mentioned her by name, Gratiot County Treasurer Terri Ball was on the hot seat as an audit report was made at the county commission meeting last week.

Auditor Ali N. Barnes of Yeo & Yeo started her report with the good news.

Overall, she said the county’s finances are in order with a general fund balance over $9 million (as of Sept. 30, 2021). “That’s a pretty cool accomplishment for a rural county. It’s a testament to the finance department and your administration and, of course, you’re watching your spending and making sure you’re making every dollar count.”

However, the audit turned up problems with the county’s delinquent tax revolving fund.

“There were several asset and liability accounts within this fund that were not properly reconciled at the end of the fiscal year,” Barnes said. 

“We worked extensively with the treasurer, who is really good to work with,” Barnes continued. “We came in and sat one-on-one going through amounts and a lot of paperwork to get these numbers where they needed to be.”

Treasurer Terri Ball at a campaign event in 2020.

Ball is new to being a county treasurer, having been elected in 2020 and took office in January 2021.

“Whenever you have change in the treasurer’s position we don’t always expect a seamless transition,” Barnes said. “Because sometimes those that are leaving aren’t always cooperative in teaching people coming on board. And learning the treasurer’s position is a lot of work. There are many facets to the job, and it does take some time to learn all that has to be done.”

Barnes went on to blame the imbalance on the practice of relying on a single employee to handle the delinquent tax revolving fund.

“A lot of the reconciliations and even some of the posting of numbers in this fund were done by one person,” Barnes said. “And that person was solely relied on as kind of knowing what they were doing. They kind of professed to know what they are doing. But there wasn’t someone overseeing that work. And so when we got to the end of the (fiscal) year that person was no longer here and the accounts weren’t reconciled. So this is definitely an area for improvement.”

Barnes recommended additional training for Ball’s staff and monthly reconciliation reports on the delinquent taxes revolving fund. “If this fund does not get reconciled on a monthly basis it’s easy for it to get out of control because so many transactions get posted,” she said.

Incomplete investment reports

Another area of concern for the auditor was reports of county investments to the commission, which were often wrong. “On some of the monthly investment reports there were accounts listed that were no longer accounts of the county,” Barnes said. “Some of them had the wrong names for accounts. Some hadn’t been updated correctly for amounts.”

Commissioner Sam Smith asked how commissioners can know if the reports they get are accurate.

“Unfortunately, because the treasurer’s position is elected, there is not always as many checks and balances over some of the work that happens there,” Barnes said. “The best control would be that someone else reviews the report prior to it coming to you for review. Outside of doing something like that you’re relying on the work of one person.”

However, Barnes assured commissioners that there was no missing money.  “I believe that the money is there and not missing,” she said. “It’s just that the report you’re getting is not correctly updated to give you accurate information.”

100 percent staff turnover

There was also a problem with the county’s Brownfield Development Fund, which ended the fiscal year with a $9,296 deficit. Alma collects taxes from the brownfield site, remits them to the county treasurer who refunds them to the site owner. 

Alma sent $9,296 to the county but didn’t identify it as brownfield taxes. So the money was deposited in the delinquent tax revolving fund. The board voted to transfer that money from one fund to the other, thereby balancing the books and eliminating the deficit. 

Blame for this was laid on 100 percent turnover in the Alma treasurer’s office and the county treasurer’s office in a resolution signed by Commission Chair Chuck Murphy and County Clerk Angie Thompson. 

“Many transactions between the two entities were incomplete and inaccurate,” the resolution said.

Ball is training at a Michigan Municipal Treasurers Association affair this week, but took the time to respond to an email:

“Very seldom is there a seamless transition in any elected office,” she wrote. “There is no training or information relayed as the exiting elected official is often not leaving by choice. I believe training is essential and ongoing. My new responsibilities are taken with the upmost significance and due diligence. This also speaks to the investments portion. Everyday the learning curve becomes less as my staff and I strive to create an efficient, welcoming atmosphere. Staffing changes have been necessary to fulfill the goals and expectations of the office. Reconciliation was not completed at the time my term in office began. I worked with the auditing firm to rectify and complete this process. My staff and I continue to implement new internal controls.”

The treasurer’s staff comprises one full-time individual and two part-timers

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