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'Grievous' shortcomings at Sarpy County Treasurer's Office prompt state audit

'Grievous' shortcomings at Sarpy County Treasurer's Office prompt state audit

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State auditors say the Sarpy County treasurer has failed to balance some county financial records, lacks an understanding of bookkeeping practices and allowed the deputy treasurer to take a Hawaiian vacation while officially on the clock.

State Auditor Charlie Janssen’s office in January plans to begin an audit of the operations led by Sarpy County Treasurer Brian Zuger, who was elected to the $101,000-a-year position in November 2018.

A report released by Janssen’s office this week detailed county financial records that were incomplete or inaccurate and a patchwork system of record-keeping that made it difficult to reconcile some financial data. The audit, called an attestation, will cover the period from July 1 through Dec. 31.

“The treasurer is in control of over $130 million on a daily basis, making his obvious accounting shortcomings particularly grievous,” the report says.

The county will be on the hook for the cost of the audit, as well as some work the State Auditor’s Office has already completed.

Zuger on Tuesday said that the concerns identified by the state are the result of an “antiquated” system of record-keeping and the need for more employees, better training and updated technology. He said that his office has been making changes to its practices but that the pandemic caused delays.

“I want to have a transparent and open office,” Zuger said.

Don Kelly, chairman of the Sarpy County Board, said in a statement Tuesday that board members and Zuger welcome the audit. The County Board has hired an independent firm to conduct a separate audit.

The state began working with the County Treasurer’s Office in April. Obtaining information over the past several months was “extremely challenging,” and as of Monday, auditors had not received full access to necessary records, the report states.

One example of the auditors’ findings: The county’s most recent semiannual financial report contained an apparent $1.9 million discrepancy that the report says could not be explained. In another instance, county investment records initially indicated a shortage of $8.6 million; further examination showed that investments held at the bank actually exceeded county records by more than $500,000.

Zuger chalked up those kinds of discrepancies to bookkeeping or system errors — nothing more sinister.

“There’s not money missing,” Zuger said. “We reconcile to the bank. It’s a clerical error that got blown out of proportion.”

Some bank reconciliations were not completed in a timely manner, while others were not provided to auditors, according to the report.

Zuger said the county is in the process of replacing a controller position in his office, as well as adding accounting technology that will automate some processes.

Auditors also said that Deputy County Treasurer Dan Templeton took a two-week vacation to Hawaii in July 2019 that was not documented on his employee timesheet.

A response in the report by a deputy Sarpy County attorney stated that Templeton’s work hours are considered round-the-clock. The attorney wrote that Templeton often works 12-hour days in addition to evenings and weekends.

Zuger agreed to allow his deputy to go on the family vacation without taking leave because of those excess hours, the county attorney wrote.

Auditors did not find a state statute or county policy that addressed the vacation situation. But the agency “believes that government pay should be received only for actual work performed or actual leave earned,” the report states.

State statute doesn’t require Zuger to be a certified accountant. He is responsible “for hiring adequate staff to ensure that the office runs smoothly, accounts are balanced, and all monies received by the County are recorded accurately,” the report says.

Zuger, who served two years on the County Board before he was elected treasurer, said he has a master’s degree in public administration with a specialization in finance from Bellevue University.

The report notes that the County Board has the ability to remove the treasurer from office and appoint someone else.

reece.ristau@owh.com, 402-444-1127

@reecereports

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