County to stick with State Auditor for annual audits

STATE AUDITOR'S AUDITS

Are we happy there was the issue of property tax being collected on the Newberry Center  building that could’ve been there for the past 30 years and they just decided that this year? Were we happy with inaccuracies in some of the math we had on the report? I wasn’t particularly happy with those.”

Tom Schulz, Lee County Supervisor

LEE COUNTY – Lee County seems to be in agreement on sticking with the Iowa State Auditor’s office in conducting the county’s annual financial audits.
Lee County Supervisors discussed the issue Monday morning as part of their agenda for the regular meeting.
The county currently uses the State Auditor’s office for the review at just over $90,000 per year. Earlier this year, supervisors decided to go out for request for proposals to see what other prices they could unearth for the required annual services.
However, Lee County Auditor Denise Fraise said she inquired with most local accounting firms that do audits and sent out the RFP regionally and only received two proposals.
One was from the Iowa State Auditor’s office and the other was from Forvis Mazars out of Kansas City, Mo.
The two proposals were very close in cost to the county with the auditor starting at $96,100 for the audit of this fiscal year's books. That cost would increase to $101,000 in 2025 and $106,350 in 2026. Mazar’s proposal came in for the same years at $95,150, $99,845, and $104, 721.
The State Auditor’s proposal would generate a final report in March, while Mazar’s production timeline would be the end of January each year.
Renstrom said the state auditor is about $2,000 a year higher than the Mazar proposal, but Mazar only proposed for a single audit program and anything else would be additional costs to the county.
That plan also charged the county about $455 per hour compared to the state auditor’s rate of between $84 and $118 per hour, resulting in more hours being spent on the county audit under the state auditor’s program.
Renstrom said with all the changes happening at the state level and more federal money coming into the county with the Lee County Health Department, she doesn’t want to shift gears at this time, nor does she have the time to transition to a new company.
“I didn’t have time to understand a new company coming in and asking questions,” Renstrom said.
Supervisor Tom Schulz said he had concerns with the 2023 audit, including a review that included a possible conflict of interest with his company, Your Heat & Air Guy, for services provided to the county. But Schulz appealed the opinion on the county’s audit and they issued a correction. He also questioned the state auditor’s handling of an opinion the county should be collecting property tax on leased property.
“Are we happy there was the issue of property tax being collected on the Newberry Center  building that could’ve been there for the past 30 years and they just decided that this year?” he asked.
“Were we happy with inaccuracies in some of the math we had on the report? I wasn’t particularly happy with those.”
Renstrom said that could’ve been a result of the information that was provided to the auditors.
“That might be how it came across when we gave it to them. We might have given them too much information that we shouldn’t have,” Renstrom.
Fraise said no local firms had the manpower to do it.
“All that got back to me said that they didn’t have the manpower to do it,” she said.
Schulz said the detail in Mazar’s proposal was a thousand percent more detailed than the state’s proposal, but said it didn’t look like there would be a lot of savings in changing.
Renstrom said state auditors already have access to Iowa Grants website to pull that information, while she wasn’t sure if the private company would be able to do that or rely on the county to get it done.
Supervisor Matt Pflug asked Renstrom if this was the right time to be making the change and Renstrom said it was her opinion that the county stick with the State Auditor’s office.
Chairman Garry Seyb said he was surprised that only one other company responded to the RFP.
“It's eye opening to me that this was put out to all local auditors and a fairly wide area and we only got two and there seems to be a fairly wide gap on experience,” he said.
Renstrom said about half the counties in the state use the State Auditor’s office and the other half use someone private to do the audit.
Fraise said Renstrom’s opinion should be given the preponderance of weight.
She said she likes to have the final audit reports in by the end of March so they can get them to Moody’s, the county’s bond rating company.
“They (the state) were a little late last year because they were having to do a lot of work on the state audit, so they were putting ours aside for awhile. Last time it was, like, June 30 when we got the final audit,” she said.
“As long as I can get them a preliminary report, they are happy until we get them a final audit.”
Schulz confirmed the state auditor’s office was very responsible in getting errors corrected and the experience he’s had with them has been very good.
“We did our due diligence to see if we could save money,” he said.