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State audit: County has slight problem with bookkeeping

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State audit says no money missing, but changes in procedure needed

By Lisa King

The annual audit of the Shelby County Fiscal Court turned up an issue that auditors say needs to be addressed immediately: a lack of internal controls for the ambulance payments the county receives.

The audit summary report, compiled by state auditor Terry Sebastian, says the same employee has been responsible for too many EMS-related duties, such as billing for ambulance service, collecting money for billings and for tracking accounts receivable.

“Good internal control dictates the same person should not collect payment and account for receivables,” Sebastian wrote.

He offered some suggestions as to how the Fiscal Court could correct this problem, including hiring an independent company to do ambulance billing, a step that magistrates already have taken.

Sebastian said his concern is not serious at this time. No money is missing, and he is not singling out any particular employee or accusing anyone of wrongdoing, only that the potential was there for a problem to arise.

“There has been no misappropriation of funds, but to keep something like that from happening, you need to have more than one person involved so that one can keep check on the other one,” he said in a telephone interview.

Shelby County Judge-Executive Rob Rothenburger said in response that the county is training a second person to do ambulance billing and collecting as well as contracting with the outside agency.

 “A second company has been hired to collect bad debt, when all attempts have been exhausted, then the new county ordinance for write offs will then be put in place,” he said. “Monies coming into EMS will be received and recorded in a ledger by the receptionist, totaled daily and given to the treasurer and/or county judge- executive to balance with a deposit ticket.”

Shelby County Treasurer Paula Webb said that hiring an outside company to collect overdue ambulance bills was something the county had been considering for a while.

“It was something we wanted to do because we don’t want  to put any citizen in a hardship situation,” she said.

At their meeting May 4, magistrates voted to hire Credit Clearing House Inc. to handle delinquent collections for Shelby County EMS.

Mike Gardner, owner of the company, told magistrates at that time that collection attempts would target people who have the ability to pay but have made no attempt to do so.

“We just want you to know that we are not going to be pressing a little old lady who has nothing,” he told them.

The audit also cited inaccurate documentation concerning federal reimbursement requests from FEMA.

Auditors said county requests for damage incurred from Hurricane Ike and the January 2009 ice storm were not well-documented, resulting in the county being overpaid for one claim and underpaid for the other.

For Hurricane Ike, FEMA reimbursed the county $844 for hours worked by employees that weren’t actually worked. For the ice storm, the county should have been reimbursed $26,466 more than it was..

The latter error, the audit stated, “was an incorrect equipment rate used for a dump truck. Per FEMA’s schedule of equipment rates, the dump truck should have been reimbursed at $43 per hour, but the project worksheet showed only $19 per hour.”

There were also a few other errors in the FEMA worksheets, auditors said.

Emergency Management Agency Director Charlie Frazee said the thing about the FEMA worksheets is that “unless you catch it before it’s turned in, you won’t know about it until it shows up in the audit.”

Also, Frazee said, the final FEMA inspection hasn’t been completed, and it’s standard procedure to address any problems at that time.”

Webb called the FEMA errors “not a big deal.”

“Sometimes these things get overlooked,” she said. “Like, we owed them $844 but they owed us $26,466. Also, sometimes the criteria changes for each disaster. We’re not perfect, but we’ve got the nuts and bolts correct.”

Sebastian agreed with Webb’s assessment overall.

“It’s just an issue of having good internal control by laying out procedures the county can use to make sure funds are managed appropriately in the future,” he said.