The Isanti County Board received a clean audit report at its July 17 meeting. The audit report was presented by Julie Mader of the Office of the State Auditor.
During the audit, there were no difficulties dealing with county management; no misstatements noted, so no audit adjustments needed to be made. There were no disagreements that came up during the course of the audit, according to Mader.
“The opinion we issued is the best opinion you can get,” she said. “If there’s anything other than that, it would state it in this paragraph. But it does state in our opinion the financial statements referred to above present fairly in all material respects the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Isanti County,” Mader said.
She noted there were no material weaknesses identified in financial statements, and no non-compliant materials in the financial statements. However, there were two significant deficiencies related to internal controls.
The county’s two federal programs audited were highway planning and construction and medical assistance.
There were also no material weaknesses found, but there was one significant deficiency identified related to the medical assistance program. The Office of the State Auditor issued an unmodified opinion over the major federal programs, which is the highest opinion a county can get, according to Mader.
Isanti County does not qualify as a low-risk auditee, which means the Office of the State Auditor audits 40 percent of federal expenditures versus 20 percent.
Deficiencies related to internal controls
A repeat finding for the highway department is segregation of duties due to limited staff of the department, making it hard to segregate accounting functions. The recommendation from the Office of the State Auditor is for the county to be aware of the lack of segregation of duties, and, if possible, implement oversight procedures to ensure that the internal control policies and procedures are adequate.
Another repeat finding is related to implementing a comprehensive set of policies and procedures.
“Over the last few years, there has been a lot of progress in this area,” Mader said, noting there are a lot of good policies and procedures in place. The county only needs a few more in some of the areas in order to follow the accounting standards, as well as implementing the monitoring of the internal controls and the risk assessment, she added.
A third repeat finding is related to the medical assistance program and eligibility testing. During the audit, a sample case of 40 files were looked at to compare what is in the case file and what is entered in the Maxis system.
There were five case files that had documented assets, such as income or bank account statements, that did not support the information entered into Maxis. There was also one case file that had income that could not be appropriately determined based on the support that was in the case file.
“We are not saying that these people weren’t eligible, they probably were eligible,” Mader said. “It’s just that the information in the file did not match what was entered, so there were errors there. As we all know, medical assistance is a very complex system. They are dealing with a lot of case files, so it is high volume. So there’s always some human error taken into consideration.”
In order to correct the problem, human services is conducting supervisory case reviews, Mader added, noting the complexity and the volume of cases make it is hard to get away from having no errors at all.
Fund balance analysis
The audit report also includes an analysis of the fund balance. The county’s current fund balance policy states that the general fund and human service fund should maintain an unrestricted fund balance equivalent to 30 percent of the subsequent year’s budgeted fund operating expenditures. The road and bridge fund will maintain a minimum fund balance equivalent to 20 percent of the following year’s budgeted fund operating expenditures, according to county policy.
She acknowledged that she does the calculation slightly differently than the county auditor Chad Struss, which may skew the numbers slightly. The analysis indicates that the road and bridge and human service funds are okay, but the general fund is slightly less than it should be, according to Mader.
“I just want to thank the county staff, all the departments, Chad’s department especially for making the audit go so smoothly. It’s always a pleasure to work with everyone here,” Mader said.
County assessor resigns
County assessor Michelle Moen will resign effective Aug. 15, and the board approved placing deputy assessor Elisha Long in the position of interim assessor. The board has 90 days from Aug. 15 to appoint an assessor to fill the remainder of Moen’s term. However, the Minnesota Department of Revenue can grant the county a 90-day extension to replace Moen.
Board approves cocktail room license for microdistillery
The board approved a cocktail room license for Isanti Spirits. Owner Rick Schneider informed the board that he has been doing limited bottle sales over the last few years, but this is an effort to refocus the distillery toward the tourism of breweries, wineries and microdistilleries.