(Taken directly from the Audit. Statements in parentheses are mine alone.)
1-2014- Material Weakness
Criteria- Cash balances and the corresponding fund balance should be reported on the County's financial statements.
Condition: The Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position and the Statement of Cash Flows are not being carried on the County's financial statements for the Jail's Commissary Fund. This fund has one bank account associated with it that is not being reported. (The jail's Commissary Fund is where monies to operate the Commissary- where inmates can buy toiletries, etc with funds deposited into their own accounts- are stored. A small bank account with which to operate a small store)
Context: A review of all the bank accounts confirmed identified cash balances not being carried on the County's financial statements. Upon further inquiry it was determined the Jail's Commissary Fund is maintained on a separate accounting system. The cash balance totaled $9,593.00.
Cause: The internal control for financial reporting does not exist for the Jail's Commissary Fund.
Effect: The County's financial statements would be misstated without the inclusion of these fund balances.
Recommendation: An internal control framework should be established for the Commissary Fund that includes an inventory of items in the commissary at the end of each month, the recording and subsequent recording of sales and purchases by the commissary, the reporting of sales tax to the State Comptroller and the reporting of fund balances to the County for inclusion in the financial statements.
(The jail keeps track of this, but does not include them in the county budget. Neglecting to account in the General Ledger or Budget for income based funds this small and separate from regular county operations is not surprising, and it's unlikely a profit center, but must be accounted for. Also, later on in the report it's reported that sales tax is being collected on these sales but not being remitted to the state)