WINNSBORO – Fairfield’s auditing firm concluded there’s a “significant deficiency” in how the county keeps its financials.
“A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance,” the long-awaited financial audit states.
Elliott Davis issued the admonishment, a key finding in the audit that was supposed to be completed, approved and supplied to the state by Jan. 1.
Audit findings were presented during a special meeting Monday. No votes were taken, though the county has since submitted the audit to the S.C. Comptroller General’s Office per state law.
Aside from the tardiness, the audit found no significant issues with Fairfield’s finances, said Ryan Miller with Elliott Davis.
“The biggest thing was the timeliness of it. Besides that, things were clean,” Miller said.
Still, the three-month delay came at a cost.
Fairfield County Council Chair Moses Bell and County Administrator Malik Whitaker didn’t let council members know about the missing audit until Feb. 1 – a month after the due date – prompting the state to ultimately withhold more than $1.5 million in state funding.
In addition to increasing the chance for error, the tardy audit means “County Council is not provided timely, accurate financial information from which to make decisions that affect the County’s taxpayers,” the audit states.
The audit further recommends that all general ledger accounts be reconciled to subsidiary ledgers on a monthly basis to minimize errors and correct them immediately when they arise.
It also states the county needs to reinstate and fund a staff analyst or fiscal analyst position that was frozen during the 2022 budget year, and that this employee would develop monthly financial closing processes.
“This initial resource will help the Finance Department develop monthly financial closing processes which will enable it to complete its annual financial closing process in a timely manner,” the audit states.
However, during Monday’s meeting, County Administrator Malik Whitaker revised the corrective action, deleting the specific job titles referenced in the Elliott Davis document.
Whitaker added that the position would not develop monthly financial closing processes. Instead, the staff position would be “responsible for reconciling all general ledger control accounts to subsidiary ledgers or other detailed schedules on a monthly basis,” he said. Meantime, the county would enact internal policies that set benchmark dates to ensure future audits are filed on time.
That the audit had not been submitted to the state did not become public knowledge until Councilman Douglas Pauley let it be known that Whitaker had forwarded emails with that information from the Comptroller General’s office on Feb. 1. In his email, Whitaker noted that councilmembers were not to share the information beyond themselves.
The state had contacted Council Chairman Moses Bell at least twice – on Nov, 19 and Jan. 4 – about the audit, documents show.
Bell casts blame
On Monday, Bell voiced dismay over the late audit, pledging the situation wouldn’t happen again. However, he mostly took aim at the Mt. Zion contract, which moves county offices into a new administration building at the site of the old Mt. Zion school.
Bell moved on to what he said is the depleted fund balance, without explaining that fund budgets fluctuate throughout the year. He said plummeted at least $14 million. He then attacked the media in apparent reference to The Voice’s reporting about the late audit.
“I’ve said for all deliberate purposes, the fund balance has been depleted. It shows itself in this audit,” Bell said. “Look at the numbers so when the tabloids starting writing, they start looking at what they’re writing.”
In reviewing council minutes, The Voice noted that Bell and the council majority that votes in lockstep with him signed off on nearly $1.1 million in unbudgeted projects since July 1, 2021.
On Aug. 23, council voted to spend $1,050,000 on a mini park in Blackstock, upgrades to Willie Lee Robinson Park, and roof repairs to the Department of Health and Human Services building.
The county hired an administrator for $135,000 annually in December, a deputy administrator for $115,000 annually two months later, and it is still paying approximately $200,000 annually each to two consultants to assist the new administrator for a total of approximately $600,000 for administrative work.
The county will incur additional costs after recently signing a lease agreement with Dominion Energy to develop another park site, this one in northern Fairfield. While the actual lease expense is negligible, the deal obligates Fairfield County to obtain at least $3 million in insurance coverage. It’s uncertain how much those policies will cost.
Fairfield must also pay for any park equipment, utilities, or other amenities associated with developing the park. A council majority approved the deal despite not identifying a funding source.
Greene vs. Pauley
Another awkward moment occurred Monday when Councilwoman Shirley Greene pursued a line of questioning in an apparent attempt to discredit Councilman Pauley.
Greene quizzed Miller, the Elliott Davis auditor, about whether he thought it was inappropriate for Pauley to contact Elliott Davis about the audit before it was completed.
Pauley has said he contacted the auditor because council as a whole never acted on the audit or asked about it. Greene has accused Pauley of acting inappropriately.
“Is it not the role of the county administrator and our controller to handle those kinds of questions?” Greene asked.
“Typically the auditor is going to speak directly with finance director and the county administrator first,” he said. “I don’t know the rules on your side of the fence in terms of reaching out.”
“Did you find this unusual?” Greene pressed.
Miller, however, remained neutral. He said the practice of a council member reaching out was “infrequent,” but never characterized it as irregular or inappropriate.
“I’m not leaning one way or the other,” he said.
