2009
Year Ended June 30, 2009
Graham County
REPORT
HIGHLIGHTS
SINGLE AUDIT
The County Lacked Controls over
Financial and Federal Reporting
Subject
Graham County is
responsible for preparing
financial statements,
maintaining strong internal
controls, demonstrating
accountability for its use of
public monies, and
complying with federal
program requirements. As
the auditors, our job is to
determine whether the
County has met its
responsibilities.
Our Conclusion
The information in the
financial statements is fairly
stated in all material
respects, and the financial
statements can be relied
on. However, auditors
identified internal control
deficiencies and found four
instances of
noncompliance with
federal requirements. The
most significant
deficiencies and instances
of noncompliance are
summarized on this page.
The County lacked internal control
policies and procedures needed to
prepare accurate and timely financial
statements, accompanying notes, and
schedule of expenditures of federal
awards (SEFA). Therefore, the County
did not submit its Single Audit Reporting
Package to the federal clearinghouse by
the March 31, 2010, deadline. Our
recommendations to address this are
summarized below.
Auditor recommendations—
Establish and follow detailed written policies and procedures for
preparing the financial statements, accompanying notes, and SEFA.
Allocate appropriate resources and enforce completion dates for
compiling the financial statement, accompanying notes, SEFA, and
supporting schedules.
Require an independent review of the financial statement,
accompanying notes, and SEFA.
The County Did Not Always
Comply with Federal
Program Requirements
The County spent over $6 million of
federal monies this past year for 26
programs. Auditors tested four federal
programs under the guidelines
established by the Single Audit Act and
found the following internal control
weaknesses and instances of
noncompliance.
Community Development Block
Grants
• Responsibilities for processing and
recording program expenditures were
not separated among employees.
• The County did not comply with
suspension and debarment
requirements.
WIA Cluster
• Financial information reported to
grantors was not adequately supported
by accounting records.
page2
Condensed Financial
Information
Statement of Net Assets—This
statement reports all of the 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 shows the net
resources available for general
operations.
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 decreased by
$572,164 in the current year. In addition,
beginning net assets were restated by
$1.4 million to correct prior year errors
related to intergovernmental revenues and
capital assets.
Condensed Statement of Net Assets
June 30, 2009
Governmental
Activities
Assets
Current and other assets $ 7,462,772
Capital assets, net 31,211,497
Total assets 38,674,269
Liabilities
Other liabilities 697,859
Long-term liabilities 1,540,108
Total liabilities 2,237,967
Net Assets
Invested in capital assets, net
of related debt 30,717,258
Restricted 4,691,394
Unrestricted 1,027,650
Total net assets $36,436,302
Condensed Statement of Activities
Year Ended June 30, 2009
Governmental
Activities
Program revenues
Governmental activities $13,265,042
General revenues
Governmental activities 15,387,530
Total revenues 28,652,572
Expenses
Governmental activities 29,224,736
Total expenses 29,224,736
Change in net assets (572,164)
Net assets—beginning,
as restated 37,008,466
Net assets—ending $36,436,302
Overall, the County’s expenditures of federal
awards increased by over $2.5 million. The
net increase was primarily the result of the
following:
page3
Expenditures of Federal
Monies Increased
• A net increase of $2 million in the U.S.
Department of the Interior’s programs,
mostly attributed to the additional funding
received from Payments in Lieu of Taxes.
• A net increase of $740,000 in the U.S.
Department of Agriculture’s programs,
mostly attributed to the $763,000 increase
in funding for the Schools and Roads—
Grants to States program.
Health and Human
Services
$494
Education
$553
Other
$903
Agriculture
$1,112
Interior
$3,501
Federal Expenditures by Awarding Agency
Totaling $6.6 Million
Fiscal Year 2009
(In Thousands)
American Recovery and Reinvestment Act (ARRA)—
Graham County spent $33,000 for WIA Youth Activities that was
funded from ARRA in fiscal year 2009.
Graham County
REPORT
HIGHLIGHTS
SINGLE AUDIT
Year Ended June 30, 2009
page 4
TO OBTAIN
MORE INFORMATION
A copy of the full report
is available at:
www.azauditor.gov
Contact person:
Victoria Fisher
(602) 553-0333
