An accounting firm that performed an audit of Caroline County finances for the 2011-12 fiscal year billed the county government an additional $30,000 above its agreed-upon fee of $55,488.
PBMares billed the county for an extra 262 hours for work that was beyond the original scope of the audit. The extra hours actually amounted to an additional $45,576, but the firm deducted a government discount of $15,576.
Most of the extra time – 200 hours – was attributed to audit activities related to the county’s public schools. The extra time included 16.8 hours for work related to federal awards plus 183.1 hours for “hours related to delays in information,” according to a PBMares invoice document.
The auditors performed additional procedures and traveled extra days for the school division because of a disagreement regarding federal forestry monies, inaccurate data related to federal awards, and “delays in providing information on agreed to dates requiring numerous travel days” to complete the audit, according to a PBMares audit document.
“Several issues also surfaced in the performance of the audit for the schools,” county finance director Frances Hatcher wrote in a memorandum to County Administrator Charles Culley explaining the additional charges. “This created delays in the audit and also created additional trips to perform the audit.”
The firm also billed 38.9 hours for “capital assets, restatements, bond costs, etc.” and 23 hours for the sheriff’s office.
School division Superintendent Greg Killough said he did not know why PBMares billed for the extra time related to the public schools.
“We’ve been requesting from the auditors,” said Killough, documentation of the additional hours “to understand why and how that came about.” School officials have not received the requested information, he said when discussing the audit on Friday of last week.
“We’re concerned too,” he added.
County Administrator Charles Culley informed him of “concerns” related to the audit process last fall, recalled Killough. “I can’t remember the details at this point.”
However, after he was notified by Culley, he immediately followed up to ensure that school officials responded timely to requests from the auditors, said Killough. “Once I was aware, I intervened and got things working out.”
Overall, the portion of the audit that dealt with the school division “turned out extremely well,” noted Killough.
The school division’s primary point of contact with the auditing firm was finance director Lifen Zhou.
The additional costs attributed to the county administration had to do with additional work to restate the previous year’s fund balance and capital assets, explained Hatcher.
“The restatement had to do with the recording of payable and accruals not previously recorded and capital assets recorded in its entirety of costs rather than recorded by the type of assets,” she told The Caroline Progress via e-mail this week. “These issues began under previous finance directors based on interpretation of generally accepted accounting principles.”
Sheriff Tony Lippa said the extra hours billed and attributed to his office “were a result of additional work to audit sheriff’s office files.”
“This cost overrun was not a result of any error or fault on behalf of the sheriff’s office but rather to complete reports that…PBMares…had incorrectly assumed were completed prior to their audit,” added Lippa in an e-mail to the newspaper this week.
The additional costs for the sheriff’s office were for an internal control audit of records and a report required by the state Auditor of Public Accounts, added Hatcher.