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Audit suggests county add accountant

September 29, 2012
By MICHAEL ANICH , The Leader Herald

JOHNSTOWN - An independent audit of Fulton County government for 2011 recommends a more-trained and "experienced" accountant in the county Treasurer's Office to better ensure proper financial transactions.

The audit noted the treasurer's office is responsible for internal control over financial reporting. The current staffing of the department doesn't include a "trained accountant familiar with government accounting and reporting," the audit said.

Toski & Co., PC - an independent accounting firm from Williamsville, Erie County -presented the results of an audit it did on Fulton County's financial statements for 2011 to the Board of Supervisors' Finance Committee on Thursday at the County Office Building.

Article Photos

Accountant John Rizzo goes over an independent audit of Fulton County government for 2011 with the Board of Supervisors’ Finance Committee on Thursday at the County Office Building in Johnstown.
The Leader-Herald/Michael Anich

"We recommend that the county retain a qualified accountant - either an employee or independent contractor - to oversee the financial reporting process of the county," the audit states. "We also recommend the county review its present capital asset accounting system and consider a system that would fully interact with the county's accounting system."

Toski & Co. Director John S. Rizzo reviewed the audit of county government for last year, which had a mix of good and bad news about bookkeeping practices and the financial state of the county.

The audit stated: "We encountered significant difficulties related to the county's accounting for capital assets in performing and completing our audit. The completion of our audit was delayed because of the necessary corrections to the schedule of capital assets, which is maintained outside of the accounting system."

Fact Box

Audit ideas

The audit of Fulton?County government for 2011 recommended:

The county acquire an experienced "trained" accountant in the Treasurer's Office;

A review of the county's present capital accounting system.

The audit of the county government also


Low $495,000 debt;

Drop of $10 million in county assets;

Increase of $1.5 million in fund balance.

The audit report requested an "experienced governmental accountant to ensure that county financial transactions and its financial statements are prepared properly" in the treasurer's office.

"Capital assets accounting records are maintained separately from the accounting system from which the financial statements are prepared, and as a result are not maintained in conjunction with the county's daily accounting transactions," the audit found. "In 2011, the county recorded additions to its separate accounting records for capital assets that were also recorded in prior years."

On a positive note, Rizzo said Fulton County "does continue to qualify as a low-risk auditee."

The county as of Dec. 31, 2011 had a total outstanding debt of only $495,000. Fulton County has a bond rating of A3 as rated by Moody's Investors Service.

County Administrative Officer Jon Stead asked if the auditing form could verify that Fulton County - with an annual budget of $90 to $100 million - has very low debt.

Rizzo told the committee that Fulton County's bonded debt amount is "not typical," and the county could incur a "significant" amount of debt if it wants.

"In all the counties I deal with, this is the lowest," the accountant stated.

The county's total net assets of governmental activities went from $53.5 million in 2010, to $43.5 million in 2011. The largest component of assets -about $37 million - was capital assets such as land, buildings, equipment, roads and bridges.

The county is "very dependent" on state and federal aid, the audit said, and that decreased by 30.5 percent from 2010 to 2011.

Rizzo said total fund balance in the county increased by $1.5 million from 2010 to 2011. The county's general fund expenditures increased by $1.6 million for 2.3 percent for 2010. Revenue increased by $6.2 million, mainly due to an increase in real property tax collection of $6 million for 2011.

As of December 2011, the county had about $38 million invested in a broad range of capital assets including the jail and landfill.

The county had federal awards totaling almost $80 million in 2011, the largest chunk being $78 million through U.S. Department of Health and Human Services earmarks.



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