CLEVELAND, Ohio — The Ohio auditor identified six issues with the accounting practices of Cuyahoga County Executive Armond Budish’s administration in 2018 that left open the possibility of financial misstatements going undetected.
The deficiencies, identified by auditors as “material weaknesses”, were released Thursday in Ohio Auditor Keith Faber’s annual report on county finances.
Unlike the county’s 2017 audit, which found that some previously-awarded employee bonuses were “illegal”, the 2018 found no instances in which the county must recover money that was improperly spent or accounted for.
Here’s a look at material weaknesses found in 2018:
•Financial reports understated a balance in its Sanitary Engineer Fund by $1.7 million, after costs associated with one project were not included. The county later adjusted its financial statement to accurately reflect the project’s costs. The county told auditors it had put procedures in place that would prevent the problem in the future.
•$3.1 million in spending related to federal grants for Medicaid and food stamps was inaccurately posted. The county later corrected the errors, and asked its budget department to appropriately categorize future spending. The same issue was identified as a deficiency in the 2017 audit.
•Costs related to Medicaid, food stamps and temporary assistance for needy families were inaccurately categorized in a state reporting system, “which subsequently resulted in the improper Federal reimbursement” to programs that were not supposed to receive it. A test of 40 expenditures, totaling $2.1 million, turned up five instances, totaling $27,800, that were improperly allocated. The county said a business manager in the county’s Division of Job and Family Services will properly re-classify those expenses, and any others that were improperly reported.
•Job and Family Services workers failed to report or verify some metrics related to federal programs within 24 or 48 hours, as required by the state. A test of 45 transactions found late approvals in eight instances. The same issue was identified in the 2017 audit. The county said it trained workers responsible for such reporting.
•Costs associated with the county executive and County Council salaries and expenses were improperly charged to federal programs — about $40,000 to Medicaid, $39,000 to food stamps, and $57,000 to Child Support Enforcement. “This internal control weakness resulted in questioned costs in excess of $25,000, for each of the federal programs denoted above, and could affect future grant funding,” the audit said. The county said it reduced such costs for 2019.
•Auditors could not find evidence that county grant administrators familiar with federal grant requirements had reviewed or approved some expenditures related to building rental expenses, utilities, mileage charges and printing services. That could lead to unallowed expenses being charged to federal programs, the auditors found. The county said it hired a clerk and trained a manager to address the problem, along with other changes in policy.
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