CLOVIS — The Eastern Plains Council of Governments met Monday morning and approved the final round of overdue audits.
With a few differences in details, the audit reports of the 2009, 2010 and 2011 fiscal years indicate poor accounting practices that either contributed to misuse of government-provided monies, or at least provided such opportunities.
Established in 1972, EPCOG is a voluntary association of county and municipal governments in seven eastern New Mexico counties. Those counties pay annual dues to participate in EPCOG, which then assists in planning and economic development.
The audits are required annually for the council to receive and disperse government money, and current EPCOG staff is not sure how state funding was possible without audits from 2005 to 2011.
In the case of every audit, the accounting firm of Hinkle and Landers said accounting processes were so poor there was no assurance caught everything.
"Because of the severity and pervasiveness of the lack of internal controls over compliance coupled with the EPCOG's inability to provide sufficient documentation of the federal expenditures," the audit report said, "the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on whether the EPCOG complied with the requirements referred to above that are applicable to any major program."
Sandy Chancey, the current director of EPCOG, said there were few surprises, because the same practices were applied in the audits of 2005, 2006, 2007 and 2008. Identified problems included:
- Poor accounting records
- A lack of internal control over grant management, and no timekeeping records to determine how much work was done on specific projects.
- Undocumented credit card expenditures.
- Interest earned from grant funds not reported as program income.
- Lax controls on travel expenses, including personal vehicle use when company vehicles were available, meal per diems paid out at full value without a receipt and travel vouchers approved by the wrong personnel.
Previous audits noted a teen mother program, which included purchases of gift cards from Lowe's and Wal-Mart that circumvented purchase control requirements. That program, Chancey said, was ended in 2009.
The one addition to the audits that Chancey noted included an error in a 2009 audit of a tax credit component. While that audit had no significant findings, it was supposed to be done by the same agency that did the overall audit of EPCOG.
For each problem identified, EPCOG issued a blanket statement: "The Eastern Plains Council of Governments understands the seriousness of these findings and has been working toward revising policies and procedures to address these issues as well as taking steps to begin working on determining beginning account balances. The accounting system is also being looked at to change security and ensure proper reports are produced. Personnel in charge at that time are no longer employed with the organization. We understand that this will take significant amount of time to complete these tasks and are working to have a fresh start July 1, 2012, and continue to work on getting audits caught up."
Chancey said she was working on more specific statements for audit sections.
In other business at the meeting:
- A resolution was approved to authorize the sale of a 2005 Toyota Tundra truck the council doesn't use. The board of directors had previously given permission, but the state auditor required 30 days of notice for the action.
- The sale of a pair of properties, 153 and 161 N. 10th Street in Santa Rosa, was approved. The closing sale amount was $110,000.
- Bank accounts established with the rental properties in Santa Rosa and the Workforce Connections were closed. The council has recently cut its ties on each of those endeavors.
- The personnel policy was updated — its first such update since 2002.