A highly-anticipated external auditor's report notes several incorrect postings were done by the Platte County auditor's office and cites a need for the auditor and county treasurer to work together to reconcile bank balances in a timely manner.

The latest external audit was conducted over and above the normal annual outside audit required to be performed for the county. County commissioners approved an additional $2,500 to cover the cost of this latest probe into a $195,000 discrepancy in the county's general ledger.

Platte County's bookkeeping discrepancy has been making news in the county for a month and became of interest statewide when Platte County auditor Sandra Thomas won the Republican nomination for state auditor last week.

Thomas, who has been absent from the Platte County Administration Building much of the time since filing for state office, was on hand to hear the external auditor's report and made a short response.

Mike Groszek of the accounting firm Troutt, Beeman and Co. of Harrisonville gave his findings in written and verbal form to the county commissioners at their regular meeting Thursday afternoon. One item of interest is that part of the problem did not reside in the parks fund as initially believed, but that a fund used for Resource Center construction was also the site of errors.

Four mistakes were found as the $195,000 in "unaccounted for" money was traced.
Groszek listed the four causes for the discrepancy as:

1. The county's cash on the general ledger was overstated by more than $62,000 in the park construction fund due to 2004 interest income being recorded twice, once in 2004 and again in 2005.

2. The county's main checking account in the park construction fund was overstated and needs to be reduced by nearly $122,000 for activity incorrectly posted to the bond trustee construction account. The external auditor blamed much of the confusion on the way the parks fund was set-up, a duty of the county auditor, he said. The way the park fund is devised makes the cash reconciliation difficult because "it is not clear what bank account is off from the county's general ledger."

"You'll have to ask the county auditor why it was set up that way," Groszek told the county commission.

Later in the public comments portion of the meeting, Platte County Auditor Sandra Thomas stepped to the microphone and said establishment of the park fund setup was done in budget meetings in 2003 with other officeholders. She said the previous county commission, specifically former county commissioner Michael Short, "wanted to find a way to deal with it without having another fund set up."

Groszek said the county does not typically maintain their funds and general ledger accounts in this fashion.

"The county has had many construction projects and construction funds over the past decade and this is the first time this set-up has been selected," Groszek said.

Reached by phone late in the day Thursday, Short said he does not recall any budget discussion with Thomas on that issue, and said Thomas' has her dates wrong, as the parks tax was passed in 2000, not 2003.

"Heck no, I don't remember it. That was five and a half or six years ago. And even if I did offer an opinion on how it would be set up, why would she take advice from me? I'm not an accountant, I'm not a CPA. She is the budget officer," Short said in a phone conversation with The Landmark.

"And if it wasn't working, why hasn't she figured that out in the past six years? To me it proves she's a pretty weak officeholder," Short added.

"For her to step up now and make that kind of assertion. . . and she's running for state auditor? The state auditor is supposed to be an independent watchdog. What credibility would she have as a state officeholder?" Short remarked.

Short and Thomas, though both Republicans, are not political allies. Thomas campaigned for incumbent Short's opponent when Short was defeated by Tom Pryor in the 2004 Republican primary for first district county commissioner.

Under questioning from Betty Knight, presiding commissioner, Groszek said the commingling of bond money and sales tax money, as opposed to separating the two, played a major role in the confusion.

Groszek said the unusual format used by the county in the park fund "can work if everything is done perfectly," but when errors occur it's more difficult to locate the source of the error, he explained.

3. Journal entries made in 2004 by the auditor's office incorrectly posted interest into the county's main account when the interest should have been posted to the account with the bond trustee. This was not related to the park fund, but instead these entries were part of the Resource Center Construction Fund.

4. Interest posted incorrectly in 2005 by the auditor's office into the county's main account when the interest should have been posted to the county with the bond trustees. This was also part of the Resource Center Construction Fund.

Early in his presentation, Groszek said county treasurer Bonnie Brown and Thomas "need to work together" to achieve the goal of reconciliation of the accounts on a monthly basis.

Groszek report says when the treasurer's office completes the monthly bank reconciliation, it should be forwarded and signed off by the auditor's office.

"This will help ensure that any reconciliation difficulties will be communicated in a timely manner," he said.

Brown did not address the commission at Thursday's meeting and told reporters immediately after the meeting that she had no comment.

Knight questioned Groszek as to when he could complete the paperwork necessary to enable the county's financial statements to be certified. Bond holders and rating agencies are still awaiting the county's financial statements for 2005, which were due on June 30 but have been delayed by this discrepancy.

Knight asked Groszek if he could have them ready by the end of August. Groszek indicated there is no way that would be possible, and indicated the end of September would be more likely. Knight then pushed for a Sept. 15 deadline, and Groszek reluctantly said he would do his best to have them ready by that time.

In the meantime, Groszek will pen a letter explaining to rating agencies the reasons why the county has been unable to meet the previous reporting deadline.

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THOMAS' REACTION

In her brief remarks at the end of the commission meeting, Thomas said "there has been a lot of confusion" on this topic.

She said she wanted to make it known the county is required to do an outside audit every year, so this isn't unusual, she claimed.

In an interview conducted with Thomas after the meeting, The Landmark pointed out the latest review by the external auditor came at an additional fee on top of his original $54,000 compensation, and was ordered only after the discrepancy couldn't be reconciled in the regular annual review.

"That's true, but he (Groszek) said he's not going to charge us for it," Thomas told The Landmark.

This comment came as a surprise to county commissioners.

"He has not told me that," Knight stated. Plunkett also said he had no knowledge of Groszek agreeing to perform the audit at no charge.

Last month, Groszek had told the commission he needed $2,500 to perform the added review and the county commission approved a contract for that amount with Groszek in a special meeting held July 31.

Thomas said: "I'm glad this issue is resolved. There is no money missing and never was any money missing."

Asked by The Landmark for her reaction to the news that multiple mistakes by her office were noted by the external auditor, Thomas blamed a lack of communication from the county treasurer's office for much of the problem. Treasurer Bonnie Brown has admitted having trouble reconciling the bank balances to the general ledger for several months, but didn't speak her problem to other officeholders until July.

"She was showing balances to us that didn't reconcile with the bank. If she had not hidden the fact that she had a problem, the matter could have been resolved," Thomas remarked.

Questioned by The Landmark if she feels the fact Groszek has donated to her campaign for state auditor places him in a conflict of interest, Thomas said she doesn't feel that it does because she will be leaving county office on Dec. 31 and Groszek will have nothing to do with the state auditor's office.

Groszek left the county building shortly after the meeting's conclusion and could not be reached at his office.