County commissioners in dark about county finances; six months of bank transactions sit unreconciled in clerk/auditor’s office

By Matt Ward

The Carbon County clerk/auditor’s office has a backlog of unreconciled transactions from county bank accounts stretching back to January, according to revelations made Tuesday evening at a meeting of the Carbon County Republican Party Central Committee.
The backlog means county officials have authorized spending throughout 2018 without a clear understanding of where the county’s bank balances sit.
This despite a recommendation from the Utah Office of the State Auditor in November 2017 that county officials, including Treasurer Kay Colosimo, then-Clerk/Auditor Seth Oveson and the board of commissioners meet monthly to reconcile the county’s financial accounts.
Commissioner Jae Potter admitted there’s only been two such meetings all year.
“After the state auditor was here and made the recommendations of do that monthly cash reconciliation between the treasurer’s office and the clerk’s office, we schedule a monthly meeting to meet with those two elected officials to get an update,” he said. “And again, this may be a bad thing to say, but I’ve had two of those meetings this year, of which I have very little information.”
Potter said the lack of bank reconciliations makes accurate budgeting for next year all but impossible.
“I have a great responsibility to make sure the budget is there. It weighs on me every day. But I can’t do it without the numbers and knowing where we are. That’s six months, January through June, it’s now August, and September is approaching,” he said.
The county’s most recent audit report for the year ending Dec. 31, 2017, noted that last year auditors were forced to reconstruct the county’s bank transactions before they could even start to audit the county’s accounts.
Seth Marsing, who is running as a Republican for the clerk/auditor position, was nominated by the GOP central committee during Tuesday night’s meeting to replace Oveson, whose last day was Friday.
Marsing said he heard from his father, Greg Marsing, a partner in the county’s outside auditor, Smuin, Rich & Marsing, that the accounting firm found cash receipts were off by $2.3 million last year.
“Hopefully, I’m not stepping on any toes here but my dad told me many times that this last audit when they went in to do the work, to do the audit, the cash receipts were out by $2.3 million when they came in,” Seth Marsing said. “What that boils down to they pretty much have to do the job of the (county) auditor. They have to go through and make sure everything is reconciled, make sure everything is done correctly even before they can do the audit. They have to do a lot of correcting the books.”
Now that same firm will be brought back in to perform similar work on a consulting basis, Potter said. The firm will lose its three-year contract with the county as a result, he confirmed.
“So what we have proposed and checked from a legal standpoint with getting the help that he (Seth Marsing) needs to get things up. We are coming onto a budget, we are coming onto needing the ability to know where we are before the end of the year,” Potter said. “So Smuin, Rich & Marsing, without violating any kind of trust or complicating any kind of issue, to come in and do certain things, they won’t cross that line. Again last year’s audit has been completed.”
A new accounting firm will need to be hired for next year’s 2018 audit.
“In regards to the auditing portion of it…when Seth is elected in November we will immediately need to send out a request for proposals to other accounting firms because at that point in time Smuin, Rich & Marsing will be disqualified from doing the audit starting with 2018’s books, which would obviously be next year,” Potter said.
Asked how the clerk/auditor’s office could get so behind on reconciling bank transactions, Marsing suggested Oveson at times tried to do more work than he was able to handle.
“I think the world of Seth Oveson, but he had a lot of outside things he was doing. He did all the financials for seven counties (the Seven-County Coalition). He did outside tax returns and there was a lot of things he was doing. Also, there are a lot of things as clerk/auditor you can’t do your job correctly unless you receive correct information from the treasurer’s office and the assessor’s office. And that’s not happening. At least it hasn’t in the past,” Marsing said.
Attempts to reach Oveson for comment were not successful.
The county treasurer said she was aware of the problem with the unreconciled bank accounts, but felt it was caused primarily by a lack of communication among county officials.
Colosimo said only one county commissioner routinely returns her emails. Another hasn’t even bothered to come by her office in the four years she’s been treasurer. Oveson for his part was often so busy that scheduled meetings were postponed. However, she said before Oveson left he had devised a system using new software that would help ease bank reconciliations. Unfortunately, he left before the system was fully functional.
As for the monthly reconciliation meetings, she agreed there had not been more than a few and that most meetings never occurred due to scheduling conflicts.
“For years and years, I’ve tried to talk to the commissioners and communicate and to (have them) come down and see what we do. We need to have monthly meetings. It never happened, it never happened and it never happened,” she said. “So when the state auditor came down and asked what our main problem was, I said no communication between the commissioners and myself and Seth (Oveson).”
Colosimo said her office’s vault has her account information ready for reconciliation, that the issue has
been one with the clerk/auditor’s office.
During the most recent audit, the county’s financial position was shown to have deteriorated overall, with four of six major funds showing deficits. Several years ago the county had a multi-million dollar surplus and officials met biweekly to go over the county’s revenue projections and expenses, usually over Tuesday lunch meetings. Commissioners back then routinely stopped any but the most urgent spending between June and September each year to make sure the county’s budget was maintained, said one longtime retired official who asked not to be named.
Today, spending takes place without an accurate picture of what is coming in and out of the county’s bank accounts. Potter said commissioners have very little power, short of cutting their budgets, to force other elected office holders to do their jobs.
State Rep. Christine Watkins (Dist-69) has a bill on file with the legislature that could allow counties to replace elected offices such as assessor, treasurer and clerk/auditor with county employees hired based on merit and experience. She said the bill was filed last year but faced a complicated future since its passage required changing a number of state codes.
“It’s a complicated bill,” she said.
Watkins says she is still working on the piece of legislation and hopes to reintroduce it ahead of the next legislative session. If passed, she said commissioners would then have the authority to hold accountable those who sit in such critical financial oversight positions.
It is unclear when Smuin, Rich & Marsing will be hired to help fix the backlog inside the clerk’s office, nor was there any mention at Tuesday’s meeting of how much it would cost.