Bullock County Audit reveals material weaknesses

A recent audit done by the State Board of Examiners revealed that the Bullock County Commission, Alabama had a number of material weaknesses in their financial reporting. The audit covered the 2008-2009 fiscal years.

The key issues uncovered were relating to the funds maintained by the county, expenditures related to different funds and lack of compliance of the competitive bid law in some instances.

More specifically the Commission did not maintain a current and accurate listing of amounts due to individuals held in the fiduciary fund, excess land sales fund and the land redemption fund. The Commission also put through the Capital Improvement Fund expenditures of the nature of general repairs, maintenance and operations that are not allowable expenditures for this restricted fund. Some of the expenditures from this fund were not supported by adequate documentation. Also the Commission pad at least $61,000 for supplies and $24,000 for food for the Jail without letting bids as required by the Alabama Competitive Bid Law.

Auditors found accounts payable and expenditures were overstated by more than $1 million in the general fund, and they found similar issues in other funds.  Auditors also questioned some leave and comp time reports.

The Commission blamed the accounting errors on switching to a new computer system and promised to reevaluate the bidding process.

The bug in the accounting at Computer Sciences

In their 10Q filing, Computer Sciences Corp. disclosed that it had found some accounting irregularities in their Nordic business unit. The issue amounts to a “material weakness” in internal controls over financial reporting. The company took a hit of $30 million to their Income Statement in their fiscal quarter two ended October 2. There is more to come, there will be another $40 million charged during the first half of FY2011. These charges were related to prior period but due to deficiencies in the internal control system were not discovered up until now.

The company said the charges reflect “accounting errors and the misapplication of internal accounting policies and U.S. GAAP, as well as from accounting irregularities in the Nordic region, principally affecting prepaid accounts and outsourcing contract costs.”

Computer Systems is developing a remediation plan, including replacement of certain managers, strengthening controllership responsibilities, improved monitoring controls and oversight, and increased discipline associated with account reconciliations. Hopefully the issues are only in their Nordic business unit and hopefully this one time charge will clear all such issues and there are no more waiting to be uncovered.