County gets good marks for its audit

Becker County has earned the highest rating on its latest audit, but there is still room for minor improvements.

Auditor Colleen Hoffman, of Hoffman, Dale and Swenson of Thief River Falls, presented commissioners with a report Tuesday saying Becker County has earned the top mark of excellence for its audit.

"You've earned the 'unqualified opinion,' which is the best you can get," she said. "It's the top bond rating (for counties), it's better than the state or federal government at this point."

The county has an A1 bond rating.

She praised County Auditor-Treasurer Ryan Tangen and his staff, particularly accountant Darin Halverson, for doing an excellent job preparing for the annual financial audit.

Garbage fees a problem

One area that needs improvement is the way fees are assessed at the county transfer station. Employees there eyeball the loads hauled in by residents and charge according to what they see.

It would be better to use a system of scales and cameras to ensure consistency, she said.

"Depending on who is working, people can not pay the full amount, or pay more than they are supposed to pay," she said. "It's just one of those things that needs to be well-regulated."

County Board Chairman Barry Nelson said the county will take that into account, since the transfer station is now in the process of being redesigned anyway.

"That's perfect timing for that," he said, "since we have some improvements going on out there."

Snubbing state and feds

As Hoffman went through her report, it became increasingly clear that government isn't what it used to be.

It's now considered a liability for the county to be dependent on the state and federal government for so much of its funding -- even though a great deal of that is pass-through money administered by the county on behalf of the state or federal government.

"Thirty-seven million is what you're spending and $16 million (of that) is state and federal money -- you can see it's a significant bite," Hoffman said. "It shows the economic dependence on state government for these sources of funding ... it's something to be concerned about because it does show dependence on other units of government."

Will state grab reserves?

In another sign of the times, counties these days are in danger of being penalized by the cash-strapped state for keeping healthy reserves, she said.

"Just because you've prudently managed the county and saved up for things doesn't mean you should be penalized for it -- but those counties that save are the ones (in danger of) getting their state funding cut," she said.

Becker County has a policy of keeping an operating fund reserve of 30-50 percent of its annual operating budget. It is currently at 45 percent, Tangen said.

That reserve has been especially important in recent years, since the state has imposed, or threatened to impose, last-minute cuts on counties that have come too late to be recouped through the county's tax levy, Tangen said.

To protect itself (and comply with changes imposed by the General Accounting Standards Board) the county needs to change the way it puts money into reserves.

"You (commissioners) need to have a discussion and have it on record why money is being reserved and for what purpose," Hoffman said.

That includes money being saved for future equipment purchases or building projects.

The new method will essentially make it easier to see the commitment level the board is placing on each project, Tangen said.

Big savings for Becker

Fewer than one in five Minnesota counties are allowed to use a private auditor for their annual financial report. The others must use the state auditor's office, at a considerably higher cost.

Becker County paid $32,850 for its audit this year, down from $49,900 in 2008 and down even further from the $76,000 the county paid for the last audit done by the state auditor's office in 2004, Tangen said.

"We hope to start publishing under our own cover," next year, Tangen said. That means the county would produce its own audit report and the private auditing firm would confirm it. Only a handful of Minnesota counties currently publish under their own cover, Tangen said.

Audit pressures

Hoffman, who (like Tangen) used to work for the state auditor's office, said she feels pressure from some of her client counties to produce a favorable audit report.

She said she has engaged in battles with several counties (Becker County is not one of them) over some of her findings that call for improvements in the way those counties do business.

She said she stands her ground, but it's difficult because those counties are free to switch to a different private auditing firm next year, and she risks losing business.