County officials new Foundation continue battle
Foundation's refusal to complete audit sparks debate over accounting
May 30, 2001
The main point of contention is the fact that the Foundation has turned in financial compilations, not an audit as the county has requested.
“We are entered into a financial agreement with the Foundation that states the county will receive an audit every April 30,” Moffat County Administrative Services Director Debra Murray said. “To this date, we’ve only received compilations.”
An audit is a more thorough examination of financial records, with the goal being to verify whether the numbers have been prepared in conformity with generally accepted accounting principles. A compilation is only a preparation of information from records, with no assurances that the numbers are accurate.
County officials want a full audit because that’s how county records are kept. For the records to remain assured, the county’s money that is involved with the Foundation needs to be properly accounted for, Murray said.
“With a compilation, the accountant corrects minor math mistakes, but does no test work, no research into the finances to verify that the numbers are fairly and truly represented,” Murray said. “We signed a financial agreement with the Foundation so we would receive an audit so our books, which are fully audited, can be properly verified. Without that assured information from the Foundation, it’s difficult to assure the county’s records are correct.”
The accounting firm of Hamilton and Villard, which does the compilations for the Foundation, told Dona Shue, executive director of the Foundation, that such an audit is unnecessary and expensive.
“The CPA who did our compilations said with the amounts involved, the nature of the records and the cost of the service, the audit was unwarranted. We deferred to his expertise and made the prudent and frugal choice, which was a compilation,” Shue said. “An audit costs three times as much, and no additional information will be gathered.”
The Foundation doesn’t want to waste money on an unnecessary service when there are better ways that money can be spent to benefit the community, Shue said.
Another factor making an audit difficult is the due date of April 30. The Foundation was unable to find a firm willing to do the work during tax season. And, the county has also not provided all the numbers, Shue said.
“We keep asking them for a record of the money that has gone directly to the Cowboy collection debt. We need to know that amount so we can adjust our payment, but so far we haven’t gotten that information. We don’t want to over pay, because the county will file any reimbursement as a 1099 payment, which causes a lot of paperwork for us and we’d rather not go through that again.”
Pam Foster, president of the Community Foundation of Northwest Colorado, said the foundation looked throughout the Yampa Valley, but was unable to find a firm willing to do the work during the tax season.
“No one was willing to take on the work. And if you look in the dictionary, an audit is defined as an examination of the records, and that’s what the compilation is,” Foster said. “Down the road, as the Foundation does more things, a full audit might become justifiable.”
The Moffat County Commissioners are not satisfied with those explanations.
“We have a financial agreement that states that they’ll be audited, and submit that audit annually. They are in violation of that contract,” Moffat County Commissioner Les Hampton said. “The county commissioners need to sit down together and look at what’s happening. This is public money we’re talking about, and it’s up to the Commissioners to make sure it is used properly.
“We’ll probably have to ask the Foundation’s board of directors to meet with us to ask some questions. After that, we’ll have to make some decisions as to how to handle this,” Hampton said.