The Office of the State Auditor (OSA) says it found a “broad range of issues” regarding Eddy County’s Fire Excise and State Fire Funds in a recent audit.
Eddy County contracted with the OSA for a Forensic Consulting Report to assist the county in reviewing Fire Excise and State Fire Fund expenditures for the period from July 1, 2009, through June 30, 2014.
The OSA says a number of issues regarding internal controls were found and reported the county did not always comply with local ordinances and state statues restricting the use of Fire Excise Funds, with the report citing more than $655,000 in questioned costs for fire equipment purchased for other municipalities.
Additionally, the OSA said, compliance with the state procurement code was not evident due to a lack of supporting documentation for large purchases – an amount totaling at least $6,016,950 – using Fire Excise Funds.
Other issues included poorly-monitored and –documented related party transactions regarding vehicle repairs and training activities using both Fire Excise Funds and State Fire Funds, and inadequate tracking of capital asset and sensitive equipment, including more than $3 million in capital assets not included in the county’s capital assets register.
The report also notes concerns of current and former employees regarding procurement, contracts and transparency that “merit consideration and evaluation by county management.”
“Management responses to audit findings should generally acknowledge the problems presented and cite corrective actions moving forward,” State Auditor Tim Keller stated in a release. “The Eddy County responses to this report acknowledge the findings and offer some solutions to prevent continued noncompliance with laws and policies; however, some of the responses regarding noncompliance suggest that the exceptions are acceptable.
“Accordingly, this office, and the citizens of Eddy County, have reason to be concerned about these serious issues perpetuating.”
The OSA says that, moving forward, it will require Eddy County’s annual financial auditor to test internal controls and expenditures related to Fire Excise and State Fire Funds as part of the annual audit process, and that failure to address the issues raised may result in impaired county financing and trigger freezes of certain funding.
