An adverse opinion on St. Clair County’s main annual audit has caught the attention of the state comptroller’s office, which suggested corrective action, but the audit found no problems.
In August, when submitting its audit of county finances, auditing firm Scheffel Boyle gave the county an “adverse opinion,” even though there were no material findings of errors or financial information risks.
This is nothing new. The county has routinely received an “adverse opinion” on its audits, largely because it has separate audits done for the Public Building Commission, the Intergovernmental Grants Department and St. Clair County Flood Prevention District, in addition to the audit for general county operations.
Scheffel Boyle handles the county’s main audit, as well as the Public Building Commission and Flood Prevention District. Auditing firm WIPFLi handles the audit of the Intergovernmental Grants Department.
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According to Scheffel Boyle’s report to St. Clair County, the county received an adverse opinion from the firm.
“The financial statements … do not include financial data for the county’s legally separate component units,” the firm wrote, referring to the grants department. “Accounting principles generally accepted in the United States of America require financial data for those component units to be reported with the financial data of the county’s primary government, unless the county also issues financial statements for the financial reporting entity that include the financial data for its component units. The county has not issued such reporting entity financial statements.
“The amount by which this departure would affect assets, liabilities, net position, revenues and expenses of the government-wide financial statements has not been determined,” Scheffel Boyle added.
Some have questioned whether Scheffel Boyle issued the adverse opinion because it wants to handle the entire county audit and does not want to share the work with another firm. Dale Holtmann, a principal for the firm, previously declined comment.
St. Clair County Board Chairman Mark Kern has defended the county’s practice of having multiple auditors instead of just one.
“The auditor always says we think you should have one auditor, sounds to me that smacks of ‘we like to do the whole thing,’ ” Kern said during a recent finance committee meeting.
“Rather than just have one auditing firm do all the audits, we feel that having multiple sets of eyes, to give us multiple opinions, is a good thing,” Kern said.
Nevertheless, the adverse opinion caught the attention of the state comptroller’s office. The state potentially could have rejected the county’s audit filing outright.
Letters requesting the corrective action were sent earlier this fall to each County Board member.
“Because of the findings in your audit … a corrective action plan and anticipated schedule of completion that addresses each of the concerns mentioned in your audit is necessary,” wrote Michael Dropka, a compliance manager for the Comptroller’s Office.
Accounting principles generally accepted in the United States of America require financial data for those component units to be reported with the financial data of the county’s primary government.
Scheffel Boyle, the main auditing firm for St. Clair County
To alleviate the state’s concerns, the county has sent the comptroller’s office the audits for the other county components, instead of just the audit of the main county operations.
St. Clair County Auditor Patty Sprague referred questions to County Financial Analyst Sue Schmidt, who works in county administration.
Schmidt said all of the other audits sent to the state were clean with no problems found.
Schmidt said the Intergovernmental Grants Department has grants and runs programs that cover other counties, such as the Mid-America Workforce Investment Board, which covers St. Clair, Clinton, Monroe, Randolph and Washington counties.
The grants department handles grant money for federal programs, and the federal government recommends using certain auditors, Kern said.
Additionally, Schmidt said state statutes require that all county funds must be audited, but do not specify it has to be by one auditor.
The county also has a Flood Prevention District, which collects a sales tax solely for flood prevention activities, such as designing or repairing levees that protect areas below the bluff from the Mississippi River. The county does a separate audit of that district, in order to avoid having money dedicated for flood prevention skewing the financial results of the rest of the county, Schmidt said.
Scheffel Boyle handles that audit.
Schmidt noted the state comptroller’s office had never in the past asked about the county’s other components until this year, when there was a change in administration in Springfield.
Madison County uses only one firm to audit its books, said Auditor Rick Faccin. That firm is Scheffel Boyle, the firm that audits most of St. Clair’s books.
“They’ve got a set of eyes on every fund,” Faccin said. “They look inside and out of our operations, look at the different funds we have, make sure money is being spent properly.”
He pointed out that Madison County also administers a workforce grant that also covers Bond County.
They look inside and out of our operations, look at the different funds we have, make sure money is being spent properly.
Rick Faccin, Madison County auditor
Faccin said having one outside auding firm provides consistency to the county.
“We feel comfortable with them, and have not had a hitch,” Faccin said. He said it is good for the auditor to see the entire county operation.
“If they find an error, they’re going to tell us,” Faccin said.
Belleville officials use one auditor to look at the city’s books, Finance Director Jamie Maitret said.
She said the city isn’t big enough to warrant having a single department have a separate audit.
The city is on a five-year contract with its current auditor C.J. Schlosser and Company.
Having a new auditor come in would include a learning curve, Maitret said.
“(They) would have to learn all the processes and who does what, where everything is,” Maitret said.
The last time the city looked for a new auditor, only C.J. Schlosser, who has been handling the audit for a long time, responded.
Maitret said there was a belief among City Council members to see whether there could be a new set of eyes on the city’s books, even though there are no complaints about the work done by C.J. Schlosser.