2009
Year Ended June 30, 2009
Maricopa County
REPORT
HIGHLIGHTS
FINANCIAL STATEMENT AUDIT
Subject
Maricopa County issues
financial statements
annually. The County is
responsible for preparing
financial statements,
maintaining strong
internal controls, and
demonstrating
accountability for its use
of public monies. As the
auditors, our job is to
determine whether the
County has met its
responsibilities.
Our Conclusion
The information in the
County’s financial
statements is fairly
stated in all material
respects, and the
financial statements can
be relied on. The County
generally maintained
adequate internal
controls. However,
auditors identified
internal control
weaknesses over the
County’s infrastructure
reporting and computer
systems as summarized
on these two pages.
Financial Statement
Audit Summary
Improper infrastructure asset
reporting—Approximately 20 percent of
the County’s total assets consist of
transportation infrastructure assets.
Auditors noted that the County lacked
adequate internal controls for reporting
infrastructure assets in its financial
statements and required supplementary
information. Our recommendations are
presented in the summary below.
Auditor recommendations to improve transportation
infrastructure reporting—
The County should implement the following policies and
procedures to accurately account for and value its infrastructure
capital assets.
• Establish guidelines to determine when to capitalize costs
associated with projects managed in conjunction with other
governments.
• Require that preservation costs be recorded as expenses in the
year incurred.
• Remove the historical value of infrastructure assets from
accounting records in the fiscal year in which an annexation
ordinance is received.
• Maintain an assets listing for land parcels and roadways that
agrees to the financial statements and update the listing
annually for improvements.
• Develop instructions for calculating the estimated and actual
maintenance and preservation costs that should be included in
the required supplementary information.
Lack of Controls over Computer
Systems—The County’s computer
systems process and store critical
information necessary for daily operations.
However, the County lacked sufficient
controls over disaster recovery, logical
access, physical access, and program
changes for its systems. Our
recommendations are presented in the
summary on the next page.
page2
Condensed Financial Information
A copy of the full report
is available at:
www.azauditor.gov
Contact person:
Tara Erickson
(602) 553-0333
TO OBTAIN
MORE INFORMATION
REPORT
HIGHLIGHTS
FINANCIAL STATEMENT AUDIT
Year Ended June 30, 2009
Auditor recommendations to improve computer system controls—
The County should establish the following policies and procedures to help strengthen
computer system controls.
For disaster recovery:
• Develop, implement, and test a disaster recovery plan.
For logical access:
• Require department administrators to review and approve access rights for each
employee.
• Ensure that access is granted to employees only as needed to perform their job
responsibilities.
• Summarize and review the activity of users with heightened access privileges.
For physical access:
• Require and maintain an approved access request form for entrance to the data center.
• Periodically review the access list and revoke employees’ access to the data center
when it’s no longer needed.
For program changes:
• Follow its change control procedures to ensure that all program changes are
supported.
Condensed Statement of Net Assets
June 30, 2009
(In Millions)
Total Governmental
Activities
Current and other assets $1,714
Capital assets 2,886
Total assets 4,600
Current and other liabilities 180
Long-term liabilities 374
Total liabilities 554
Net Assets:
Invested in capital assets, net
of related debt 2,704
Restricted 566
Unrestricted 776
Total net assets $4,046
Condensed Statement of Activities
Year Ended June 30, 2009
(In Millions)
Total Governmental
Activities
Program revenues:
Charges for services $ 288
Operating grants and contributions 229
Capital grants and contributions 124
Total program revenues 641
General revenues 1,272
Total revenues 1,913
Expenses 1,713
Change in net assets 200
Net assets—beginning, as restated 3,846
Net assets—ending $4,046
Statement of Net Assets—This
statement reports all of Maricopa County’s
assets and liabilities with the difference
between the two reported as net assets. Net
assets are reported in three major categories:
• Invested in capital assets, net of related
debt shows the equity in property, plant,
and equipment.
• Restricted net assets shows the net
resources that must be used for restricted
purposes as specified by external parties.
• Unrestricted net assets show the net
resources available for general operations.
A condensed Statement of Net Assets is
presented to the right.
Statement of Activities—This statement
shows how net assets changed during the
current fiscal year. Revenues are reported as
either program revenues (those generated by
or dedicated to a specific program) or general
revenues (taxes and revenues not raised by or
dedicated to a specific program). The change
in net assets indicates whether financial health
has improved or deteriorated as a result of
current year activities. Net assets increased by
$200 million in the current year. A condensed
Statement of Activities is presented to the right.
