The audit was conducted over the financial statements for the June 2009 to June 2010 fiscal year.
The findings included failure to pay a Capital Outlay Note and the use of software that did not include adequate application controls; otherwise, the audit was considered to be a positive one, the county mayor explained.
In acknowledging the favorable audit, Davis commended County Finance Director Lynn Burns and her staff for their hard work.
“It has been shown that Bradley County’s accounting and reporting standards are current and something to be proud of as we continue to correct deficiencies and tighten our controls,” Davis said.
The routine financial inspection was conducted by an independent state auditor. The final document pointed out “ ... Bradley County’s financial statements were fairly presented in conformity with generally accepted accounting procedures,” according to a news release issued from the county mayor’s office. The intent of financial audits is to verify that a government jurisdiction’s financial statements are “free of material misstatement.”
The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentations.
Audit highlights from the report included:
- The assets of Bradley County government’s primary activities exceeded its liabilities by $21,031,322;
- The assets of Bradley County Schools’ primary activities exceeded its liabilities by $74,361,769; and
- The assets of Bradley Healthcare and Rehabilitation’s primary activities exceeded its liabilities by $4,893,157.
Total net assets were $100,286,248.
Bradley County’s governmental funds reported combined ending fund balances of $48,830,086.
The county’s long-term debt increased by $15,366,459 during the current fiscal year. This increase was a result of the county borrowing $17,550,000 for schools, less the scheduled debt-reduction payments.
Total long-term debt outstanding at year-end was $85,814,243.
According to Howell, when internal control issues are brought to the county’s attention, immediate action is taken to correct them. Howell described the issues (findings) that the audit reported to the county mayor’s office. Both have been corrected.
- Finding: 10.01 A Capital Outlay Note was not issued in compliance with state statutes. Corrective Action Plan: As soon as the oversight was discovered by the Bradley County Finance Department, a representative contacted the Tennessee Comptroller’s Office. This note was paid in full by August 2010 as appropriated in the county’s budget. In continuation of the new action plan, which will begin immediately, all notes will be processed through the Bradley County Finance Department. Howell said this will ensure that approval of the state Comptroller’s Office for the issuance of the notes will be obtained prior to the borrowing.
- Finding: 10.02 The software used by the Bradley County Probation Department did not have adequate application controls. The software purchased by the probation department allowed any user to delete a file without leaving an audit trail. Corrective Action Plan: The county contracted a software vendor to correct the internal control issue which was accomplished in September 2010.
Bradley County has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of Bradley County’s financial statements in conformity with GAAP, according to the news release.
Because the cost of internal controls should not outweigh its benefits, Bradley County’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement, the release added.