HomeMy WebLinkAbout20162169.tiffCOLORADO
Office of Administrative Solutions
Division of Financial Services
Clint Woodruff, Controller
June 27, 2016
County Commissioner Board Chair Barbara Kirkmeyer
Weld County
RECEIVED
JUN 302016
WELD COUNTY
COMMISSIONERS
Dear Commissioner Kirkmeyer,
On July 31St, 2015 I sent you a letter explaining a financial audit recommendation involving the reconciliation of
the County Financial Management System (CFMS) and the then -state financial system COFRS. This
recommendation was first noted in State Fiscal Year 2007.
After approximately two years of work, the reconciliations were completed and it was discovered that during the
annual county administrative close-out process the full county share was not collected. The county share for any
funds spent at or below a county's allocation was correctly settled. However, for expenditures above a county's
annual allocation the state did not correctly calculate and collect the complete county share due. As per the
original letter your correctly calculated county share indicates the amount due from your county for these
expenditures is $632,002.36.
The letter sent July 31St, 2015 recognized that for some counties the immediate settlement of this amount may not
be practical. Counties were provided five settlement options in an effort to be as accommodating to each county
as possible and to provide flexibility of choice. The five options were:
1. Settle the amount in full in year one (State Fiscal year 2016) from County Funds
2. Settle the amount in three annual installments from County Funds
3. Settle the amount with the full amount of any excess revenues that otherwise would be attributed to your
county and then with County Funds at the end of the third year if any amount remained
4. Settle up to one-third of the amount with the excess revenues per year that otherwise would be
attributed to your County and with County Funds at the end of the third year if any amount remained
5. Negotiate another alternative settlement option of the amount
In order to simplify the process and close the financial statements for the year we will default your county's
selection to option 2, "Settle the amount in three annual installments from County Funds," and the first
installment will be made with the State Fiscal Year 2016 year end Settlement in CFMS.
We are grateful that we have received reimbursement or agreed to reimbursement plans with thirty-one of the
forty-two involved counties and have already received reimbursement for $5.1M of the original $7.1M variance.
Similarly, we would like to finalize an agreement to meet your county's needs as well and should you prefer an
option other than number two please contact me by July 22nd, 2016 so that we can agree to a settlement plan. If
option 2 is your preferred method, then no further action is required on your behalf.
If you have any questions or would like to discuss this further please contact me via telephone at 303.866.2732 or
via e-mail at clint.woodruff@state.co.us.
Clint Woodruff
Controller
OzYnottal I C. .LQl1,o
1575 Sherman Street, Denver, CO 80203 P 303.866.5700 www.colorado.gov/c......
John W. Hickenlooper, Governor I Reggie Bicha, Executive Director
Cc : C7, Ac7 WW/,
2016-2169
COLORADO
Office of Administrative Solutions
Division of Financial Services
July 31, 2015
County Commissioner Board Chair Barbara Kirkmeyer
Weld County
Dear Commissioner Kirkmeyer,
When I was first hired as the Controller for the Department of Human Services
during State Fiscal Year 2013, I was given the task of resolving 38 outstanding
financial audit recommendations, many dating back nearly a decade. I am happy
to say that as of the end of State Fiscal Year 2015 we have resolved all of these
audit recommendations, and that during the 2014 State Fiscal Year audit, the
Division of Financial Services received no new audit recommendations for the first
time in many years. Both of these items are an indication of the improvement in
the controls and accuracy within the Division.
The last of the 38 audit recommendations that we resolved involved the
reconciliation of the County Financial Management System (CFMS) and the then -
state financial system COFRS, and was first noted as an audit recommendation in
State Fiscal Year 2007. Completing this reconciliation involved gathering a
complete understanding of the interface between the systems, documenting the
proper procedures and reports that should be utilized, putting in place the
appropriate controls, and reviewing month after month of county settlement close
data. The amount of transactions involved in the county settlements during this
time period numbered in the hundreds of thousands.
After approximately two years of work, we have completed the reconciliations and
we have discovered that during the annual county administrative close-out process
the full county share was not collected. The county share for any funds spent at
or below a county's allocation was correctly settled. However, for expenditures
above a county's annual allocation the state did not correctly calculate and collect
the complete county share due. Your correctly calculated county share indicates
the state needs to be reimbursed $632,002.36 from your county for these
expenditures.
1575 Sherman Street, Denver, CO 80203 P 303.866.5700 www.colorado.gov/cdhs
John W. Hickenlooper, Governor I Reggie Bicha, Executive Director
While any amount due from prior annual close-outs cannot be settled using current
or future allocation dollars, counties may use their county human services fund
balance. This is where the funds most likely would have come from had they been
properly collected originally.
We recognize that for some counties the immediate settlement of this amount
may not be practical, while for others it may be the preferred choice. Therefore,
we would like to be as accommodating to each county as possible and provide
flexibility of choice. Below is a list of potential settlement options. Please notify
me of your preferred option and we can proceed as indicated. The options are as
follows:
1. Settle the amount in full in year one (State Fiscal Year 2016) from County
Funds
2. Settle the amount in three annual installments from County Funds
3. Settle the amount with the full amount of any excess revenues that
otherwise would be attributed to your, County and then with County Funds
at the end of the third year if any amount remained
4. Settle up to one-third of the amount with the excess revenues per year
that otherwise would be attributed to your County and then with County
Funds at the end of the third year if any amount remained
5. Negotiate another alternative settlement option of the amount
We regret that clearing this audit recommendation resulted in us
discovering a situation that could be challenging for some of our county
partners. We have immediately put processes and controls in place to
ensure that, beginning with the FY 2015 county administration close-out,
this will not be an issue.
I hope that the flexibility we are proposing within these options provides an
acceptable alternative for settlement of the outstanding county share of
expenditures for your county and I look forward to resolving this item with
you. I appreciate your continued support and understanding. If you have
any questions or would like to discuss this further please contact me via
telephone at 303.866.2732 or via e-mail at clint.woodruff@state.co.us.
Best regards,
Clint Woodruff
Controller and Director bf Financial Services
Colorado Department of Human Services
cc: Susan Beckman, Director of the Office of Administrative Solutions
1575 Sherman Street, Denver, CO 80203 P 303.866.5700 www.colorado.govlcdhs
John W. Hickenlooper, Governor I Reggie Bicha, Executive Director
Hello