Montcalm County commissioners haven’t heard audit report since 2006

By Elisabeth Waldon • Last Updated 10:19 pm on Friday, September 09, 2016

The Montcalm County Board of Commissioners will hear an update about the county’s budget situation from three financial, legal and consulting firms during a special board meeting at 1 p.m. Monday at the Montcalm County Administrative Building in Stanton. — File photo

STANTON — Miley Cyrus debuted in “Hannah Montana” on the Disney Channel; the St. Louis Cardinals defeated the Detroit Tigers in five games in the World Series; Vice President Dick Cheney shot and wounded an attorney in a hunting accident; and Sen. Barack Obama announced he was considering a run for president of the United States.

That was 2006 … the last time until this summer that the Montcalm County Board of Commissioners actually heard a report from the county’s auditing firm.

In 1996, commissioners hired Abraham & Gaffney, an accounting firm in St. Johns, to review and report on county finances.

In 2006, Abraham & Gaffney officials appeared before commissioners to report a fund equity balance of $1.7 million stashed away, or about 12 percent of the county’s general fund expenditures. Auditors praised the board for having a fund balance within the recommended 10 to 15 percent range, and noted a positive trend for the general fund. Auditors detailed some areas for improvement, shared some ways the county could earn more interest on funds and recommended the county amend its investment policy. Commissioners also had the chance to ask questions of of the auditor, which they did.

The following year, 2007, Montcalm County hired a new controller-administrator, Chris Hyzer, who had previously worked as a senior auditor for Abraham & Gaffney.

After 2006, commissioners didn’t hear an annual report from Abraham & Gaffney again until this summer, a few months after Hyzer had left for a new job as finance director/treasurer of the city of Ionia (Hyzer did not return messages seeking comment for this story).

Montcalm County paid Abraham & Gaffney an annual fee of about $14,500 when they hired the auditing firm in 1996. From 2007 to present, that annual fee ballooned to almost $30,000 last year and more than $40,000 this year due to fees related to the county filing its audit late every year since 2007, according to new Controller-Administrator Robert Clingenpeel.

Montcalm County Board of Commissioners Chairman Patrick Q. Carr attempted to reason to The Daily News why commissioners didn’t hear an audit report for so long, but he was unhappy with his own explanation. He said in early years of the past decade, the audit was turned in late because the county was waiting on numbers from a variety of departments. In later years of the past decade, he said the audit was turned in late because of problems in the controller-administrator’s office. The wait time and the late audits in turn pushed scheduled annual audit reports off the commissioners’ calendar and the domino effect continued.

“It just fell off the table,” Carr said. “I know that doesn’t sound good and I don’t like the way it sounds either. There’s a lot of stuff I just can’t fathom and I don’t have an answer for. I don’t think that’s a good answer — that I don’t know the answer — but I don’t know. And it bothers me that I don’t know.”

Commissioners heard their first audit report in a decade this July when Abraham & Gaffney officials were asked to present a report in person as commissioners were finally realizing the severity of the county’s budget deficit.

Montcalm County expenses have overshot revenues by an average of $2 million per year for at least the last four years, causing the county to go through nearly $9 million in the general fund and the delinquent tax fund, according to a report by Municipal Financial Consultants Inc. The county spent $1.5 million in savings in 2012, $2.3 million in 2013, $2.5 million in 2014 and $2.3 million in 2015.

In August, commissioners approved hiring Clark Hill PLC in Detroit for legal services, Municipal Financial Consultants Inc. in Detroit to assist Clark Hill and Rehmann Robson of Troy for accounting services to investigate what exactly went wrong, and when, and who or what is to blame.

Commissioners will hear an update from these three firms during a special board meeting at 1 p.m. Monday, which was also deadline day for the county to file a deficit elimination plan with the state of Michigan, but the county has since been granted a second filing extension.

“I don’t know what to anticipate Monday,” Clingenpeel said. “I think we’re going to hear a number Monday based on cuts that have to be made. We’re hoping for the best and expecting the worst.”

Commissioners will meet on the third floor of the Montcalm County Administrative Building in Stanton. The meeting is open to the public.

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