State audit findings could prove costly for Clark County

It says departments were incorrectly charged about $1.8 million




A state audit has found that Clark County improperly charged some of its departments for insurance coverage during 2011-12, and by doing so, shifted general government costs onto accounts designated for maintaining roads and processing building permits.

Fixing the problem could cost the county’s already strapped general fund more than $700,000 annually, if the costs are reapportioned according to the auditor’s calculations.

The county has responded that while it believes it can improve the documentation of such charges, it’s not sure it wrongly charged its departments.

The disagreement, and its ramifications, will likely be discussed as the county moves forward with its yearly and quarterly budget discussions.

The audit report was released Monday by the state auditor’s office. It concludes the county incorrectly charged about $1.8 million to the county road fund and the county’s building and permit fund.

Also in the report, the state auditor’s office recommends the county take a look at how it bases charges for insurance, document its methodology and repay the funds that it says overcharged.

The report asks the county to “repay the county road and (county) building and planning funds the $1,807,599 for the unallowable charges.”

The county offers a response in the state report, stating it believes the method for allocating liability insurance can be improved, and that it will “create and implement a comprehensive cost allocation plan which will incorporate the information provided by the actuary. This plan will document and support all transfers made into the fund and will be in place for the 2014 budget year.”

But the county also states in the report that it believes it “cannot determine what amount, if any, has been over/undercharged to contributing funds. …”

Mark Wilsdon, the county’s risk manager, said he believes the issue isn’t that the county misallocated the costs, but that it needs to provide better documentation on how it charges certain departments.

“I don’t think we did wrong necessarily, but that it is very difficult to track and trace,” Wilsdon said. “We just have to be consistent and follow our own policy.”

Wilsdon said the county is currently in the process of getting a report from an actuary that will give input on how the charges for insurance should be divided among the departments.

That report, Wilsdon said, will help remedy the issue.

Repaying the $1.8 million would require authorization by Clark County commissioners. The next time commissioners can talk about the matter is 2 p.m. Wednesday at their weekly board time discussion.

County Administrator Mark McCauley said the topic is not currently on the Wednesday agenda. However, the format of the meeting allows commissioners to raise concerns not officially placed on the agenda.

McCauley said if a change to the budget needs to be made, that discussion is likely a few months away.

The state auditor said it will readdress the issue in a future audit once the county has updated its documentation procedures.