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The Los Alamos County Office of Management and Budget presented the FY2013 Comprehensive Annual Financial Report to council on Tuesday. `
Not only was the report given an unmodified opinion (the best opinion possible), the county’s financial reporting also received three prestigious awards.
This is the 22nd consecutive year the county has been awarded a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Associations of the United States and Canada (GFOA).
Councilors acknowledged Deputy Chief Financial Officer Joseph D’Anna’s role in the county receiving that honor. D’Anna, who leads the team preparing the financial statements, has been with the county for 20 years.
The county’s FY2013 budget also received GFOA’S Award for Distinguished Budget Presentation for the 21st consecutive year.
Councilor Pete Sheehey announced a third honor for the county’s financial practices: the New Mexico Association of Counties’ Audit Accountability Award. The annual award is presented to one small, one mid-sized and one large county.
“The award honors those who have submitted their annual financial audits in a timely manner while receiving unqualified opinions, the highest rating you can get in an audit,” Sheehey said.
The award was presented by New Mexico State Auditor Hector Balderas, who acknowledged the county’s awards from the GFOA.
“As Mr. Balderas noted during his presentation to the county, this extraordinary feat is unheard of at the state level,” Sheehey said.
“This county has always had its books wide open and very transparent,” Councilor Rick Reiss said. Reiss presented the county’s budget to the instructor of a NMAC class on budgeting as an example of a good budget.
Janet Pacheco-Morton, a partner at Clifton Larson Allen LLP, the firm that conducted the audit, presented the firm’s findings.
Pacheco-Morton reported that the county received an “unmodified” opinion, the new term for an “unqualified” opinion.
“It means we did not have to modify our opinion due to any instances of noncompliance or immateriality during the course of our audit,” Pacheco-Morton said.
“It is the best opinion the county could achieve, with no exceptions, no findings.
“I’m also pleased to say there were no significant audit adjustments and there were no past adjustments. A past adjustment is an adjustment that did not rise to the level of being material, so management chose not to post that adjustment to their financial statements.
“We did not find any errors within the financial statements, so we did not post any adjustments, which is also significant to know for an entity of this size and complexity. It’s rare that that occurs within any audit.
The firm also had no disagreements with management or difficulties performing the audit.
I do want to point out that the County of Los Alamos is one of the few counties in the State of new Mexico that compiles their own financial information and their own report,” Pacheco-Morton said. “And that’s a great accomplishment.”
D’Anna attributed the results to a county-wide team effort, coordinated through approximately 30 very diverse operations.
“We are very decentralized. We have a lot of departments that are accepting cash. They are recording their own expenditures, although they flow through and get approved,” D’Anna said. “So it really does take a lot of effort throughout the county to accumulate our financial information.”
Pacheco-Morton reported one finding, which follows the county every year. State statute requires that all cash receipts be deposited within 24 hours, but the county’s method of accounting delays some of those deposits.
“This is the lowest level of finding that an entity can receive, so it’s not a significant issue in our opinion,” Pacheco-Morton said.
“And there’s a very good reason for that occurring, in that management has determined that it is more important to have controls in place that require the county to have one central point of deposits to be able to account for that money at any point in time, which delays the actual depositing of the cash.”
D’Anna explained that all remote sites such as the aquatic center and golf course are required to bring their receipts to the customer care center, where they are reviewed and combined into one deposit.
That means that receipts taken in on the weekend do not get deposited until Monday.
“It eases doing bank reconciliations and tracking these back, and we don’t have county employees from all over heading to the bank and dropping deposits, which we would then have 17 deposits a day, as opposed to one that’s already been reviewed,” D’Anna said. “So it’s basically a design to insert internal controls.”
D’Anna believes there is a way to work through the New Mexico Department of Finance and Administration to get approval for the county’s accounting controls so the finding is no longer repeated every year.
Clifton Larson Allen evaluated the information technology processes of the Department of Public Utilities this year, since so many transactions go through there. The evaluation resulted in two recommendations.
“We noted that too many individuals had access to the data center without having a valid business reason for that access, so we recommend that that access be limited to those individuals that actually need the access,” Pacheco-Morton said.
The firm also recommended that the department institute a method for identifying when its information technology policies and procedures are updated. Currently there is no way to identify when the various policies were put in place.
Council voted to accept the Comprehensive Annual Financial Report by a 7−0 vote.
“An excellent audit like this does mean dollars for our county because it affects our bond rating and things like that,” Councilor David Izraelevitz said. “So I want to echo the thanks to Joe and his staff for work well done.”