“Failure to resolve significant findings or implement corrective actions must result in the suspension of financial assistance in in accordance with the rules adopted by the ministry pending resolution or compliance.” MCA 2-7-515
Glacier County officials learned a hard lesson on Tuesday, July 20. “Partial progress” isn’t enough when it comes to asking the state of Montana to release the funds it began withholding in 2019.
President Mary Jo Bremner, along with fellow Commissioner John Overcast, CFO Chancy Kittson and County Prosecutor Terryl Matt, traveled to Helena last week for a face-to-face meeting with state officials, hoping to convince them to release $ 675,983.80 on the state of Montana withheld due to repeated audit findings.
“We are not in a position to stop withholding funds for partial progress,” said Misty Ann Giles, director of the Department of Administration (DOA). Giles acknowledged that progress is being made by Glacier County. “I want to applaud you. I think we’re closer than we’ve ever been in years.
“We are happy to see an improvement,” said Branden Beatty, director of the Department of Revenue (DOR), but he was quick to point out that state officials would not release the nearly $ 700,000 in funds he holds.
Two years ago, Mike Manion, deputy director and chief legal counsel of the DOA, wrote to Glacier County officials to inform them: “Given the lack of sufficient progress in resolving and resolving the major issues that the county agreed to resolve in its CAP (Fiscal Year 2015-16 Corrective Action Plan) – and repeating these issues in the FY 2017-18 audit report – the DOA has no other choice than to suspend financial aid.
At last week’s meeting, Bremner told DOA and DOR officials that the county team had “worked tirelessly and successfully … we are not denying the guilt … and there is still a few points to be settled “but the county is having its problems” chief over “and” trying to right the wrongs of the past “.
Bremner said Glacier County saw “remarkable improvement” between the 2019 and 2020 audit and called on the state to “adjust” the “ongoing punishment for residents of Glacier County.”
Tracy Morano of DOR reminded the Glacier County contingency that $ 1.1 million is still owed to the state of Montana by Glacier County. Morano said it was “No. 1 problem that needs to be resolved.
Earlier in the meeting, however, Matt said Glacier County believed they had overpaid DOR.
Six years ago, the state of Montana informed Glacier County commissioners that they had until Friday, July 24, 2015 to make a $ 1 million “deposit” for amounts Glacier County owed to the government. Ministry of Revenue (DOR) at that time.
“We really recognize the significant progress” that has been made under Chancy Kittson’s leadership, said Cheryl Gray of DOA. However, given that the county’s audit for fiscal 2020 still had important and repeated findings, Gray said the state must continue withholding funds from the county.
Kittson told DOA and DOR officials that withholding funds “put us in a situation” where the county had to stop providing certain services. As such, the county is on the defensive and has researched how DOA and DOR apply MCA 2-7-515 to other counties in the state.
Using Stillwater County as an example, Kittson said the county has repeated findings dating back to 2016 and “not $ 1 was withheld. It sounds like disparity.
State officials retorted that no other county in Montana has ever had an audit using “going concern” language. “It really uplifted Glacier County in state action.”
The auditors who performed Glacier County’s audits for fiscal year 2015-16 and fiscal year 2017-18 both concluded that “… the county has a significant negative net cash position in its government funds. These conditions raise substantial doubt about the county’s ability to continue operating.
DOA and DOR officials said their main goal is to help cities, counties, towns, etc. to get on “the road to success” and they are currently working with other counties just like they did it with Glacier County.
Manion pointed out that the state of Montana began withholding funds in 2019 after giving Glacier County officials three years to correct findings from previous audits. Under MCA 2-7-515, state officials could have started retaining much sooner, but instead chose to try to help county officials with training, he reminded attendees.
Manion added that there had been “a lot of correspondence with the county” and that the state would continue to withhold funds based on state law.
Treasurer Don Wilson, who was appointed in June 2018 and subsequently elected to the post, attended the meeting by telephone. “Does the law only apply to Glacier County?” ” He asked.
A summary of audit findings presented by state officials showed that Glacier County had 16 audit findings during the 2013-2014 fiscal year audit; 17 in the 2015-2016 audit, with eight of these repeated findings; 20 audit findings in the 2017-2018 audits, of which 13 are repeated; 16 audit findings in fiscal year 2019, of which 14 are repeated; and eight results in fiscal 2020, seven of which are listed as repeated results.
State officials said they “have no evidence that you have resolved your important findings.”
The three significant findings from the last audit were all listed as “multi-year” findings and related to tax challenges, bank reconciliations and budget authorization overruns in several funds.
Three repeat results and a new “insignificant findings to watch” were also included on the summary, along with a repeated “insignificant” result related to the county’s accounts payable.
DOA officials have said every year when Glacier County submits its corrective action plan, “you say you’re going to do something to fix it and it’s not done.”
During his presentation, Bremner pointed out that Glacier County had reduced its excessive budget spending from $ 1.2 million in 2019 to just over $ 28,000 in fiscal 2020.
Full monthly cash reconciliations dating back to January 2020 are still needed, state officials say. Glacier County’s last accepted reconciliation dates back to December 2019.
According to the state, the monthly cash reconciliations submitted do not include supporting documents, such as bank and investment statements, that are needed to prove the county’s financial position. Documents on some $ 500,000 in disputed taxes held by the state are also needed. “There’s nothing we can do until we get this information from Don.”
Wilson replied that he had provided everything to the state “every month”, adding that he had a “pile of problems” with DOR and the alleged mistakes they had made “but that’s for another time. and another meeting “.
Kittson said the county and its consultants had spent “thousands of dollars and countless hours” trying to correct the situation left behind from a backlog of bank reconciliations.
Beatty offered to meet with Magda Nelson, a consultant hired by the county, and Wilson, in Kalispell, to review the spreadsheets and other documents. Nelson lives and works in Kalispell and does not travel. She spoke several times during the meeting, which was held via the Zoom conference, which allowed relevant members of the public to see or listen to the meeting.
Bremner concluded the meeting by saying county officials need a “clear understanding” of what is needed for the state to stop withholding funds. She assured the DOA and DOR that the county would provide the necessary documents requested, adding that she wanted to move Glacier County “forward and not back”.