State Auditor releases evaluation of Utah’s counties
On Feb. 20, the Office of the State Auditor released its “Internal Control Report: An Evaluation of Utah’s Counties.” The Local Government Division of the Office ensures uniform accounting, budgeting, and financial reporting by Utah’s local governments. This report serves as a baseline evaluation of the current state of internal controls for Utah’s 29 counties.
The term “internal controls” is used to describe processes put in place by the governing body, management, or others to provide consistent and efficient operations, including reasonable assurance that funds will be properly safeguarded.
For example, the segregation of duties of clerk and treasurer in any local government entity has been described as one of the most effective deterrents of fraud. A number of recent cases of theft or fraud in local governments have been the result of inadequate internal controls.
The purpose of this report is to gauge the extent to which county legislative bodies, including county commissions and county councils, have created formal internal control structures in accordance with state statute and best practices in order to protect the county from potential fraud, waste, or abuse. Collectively, the 29 counties had already adopted two thirds of the practices we tested. However, the team identified three key areas that still need improvement:
—Adequate separation of duties over cash accounts such as a separate county clerk and county treasurer.
—Internal monitoring of compliance with financial requirements.
—Tracking compliance with conflict and ethical requirements of officials and employees.
“Utah’s counties are working to properly implement internal controls,” said Auditor John Dougall. “Many have already adopted the recommendations made in these reports. However, given the size of county budgets and the number of citizens served by our counties, it is essential that they ensure proper separation of duties and that county commissions and councils exercise proper financial oversight.”
The summary report may be found here. The individual county reports may be found here.
