The Hays County Commissioners Court discussed the possibility of a 10year historical review and forensic audit that would possibly include a review from Jan. 1, 2012 to Dec. 3, 2022.
This audit was requested by Hays County Treasurer Daphne Tenorio at the regularly scheduled meeting on Tuesday, July 11. The court chose to take no action on that request after a discussion of procedures that pinpointed an alternative direction.
Tenorio said there was a lack of policies, procedures and support in her office for incoming elected officials, including herself.
“One of the main differences between an audit and a forensic audit is that a forensic audit will actually be able to help us build policies and procedures for these offices,” Tenorio said. “What I want to know is policies and procedures — that is something that would have been very helpful coming in.”
Tenorio said officials with the Texas Association of Counties told her there should have been an audit of her accounts before she stepped into the role.
“The former treasurer should have had an ND balance notice where she signed off on it, and I would have come in and known that the auditors office had already reviewed those numbers, and I would have signed onto those numbers. We are into July, and I have still not signed off on those numbers. That is something that I know we’re working on.”
Hays County Commissioner Michelle Cohen, Precinct 2, asked if the scope of work was done in collaboration with the Hays County procurement department, and Tenorio said it was not.
“If we’re talking about policies and procedures, I think that normally this starts with a conversation with procurement to help develop this,” Cohen said. “Procurement are the experts on the development of this scope of work, so they should have some kind of input on what to ask.”
Hays County Commissioner Lon Shell, Pct. 3, said the county has an auditor’s office that is set up by state statute, and, by design, that office is not employed by the court.
“I want to try to understand the difference between this audit and the continual auditing going on either internally or externally because we do have external auditors that come in,” Shell said.
Shell added that if an audit is what Tenorio wants, then the auditor’s office is where she should start with her request. He said to start with the audits that are already conducted, and if there are additional things she would like to know, then she should ask the auditor for those items.
Hays County Auditor Marisol Villareal- Alonzo said that her office is currently conducting an ongoing Exit Audit of the treasurer’s office.
“It’s reviewing transactions between October and December from the previous administration and that includes the sign off of the account balances and includes a sign off of the fixed assets,” she explained. “We’re waiting on the new treasurer to sign off on the fixed asset listing, so we can complete that audit. I have a draft of where we had been auditing the prior administration in the prior year.”
“The work papers and the draft are on my desk for review, which will identify the findings from the office as far as where there was improvement,” Villareal- Alonzo continued. “I know that every month these offices are required to submit monthly reports to my office which have their reports of all of the cash balances and their bank reconciliations for all of the funds that they manage.”
Villareal-Alonzo said she has to compile all of the monthly statements for the county offices at the end of the year to create one county- wide financial statement that is in accordance with accounting standards boards.
“The general ledger has been audited in that aspect by our outside auditors which the commissioners court approved. Again, we have submitted those financial statements to the [Government Finance Officers Association of Texas], and it’s been meeting the transparency [standards] and meeting the requirements under generally accepted accounting principles,” Villareal- Alonzo said. “I haven’t seen [the audit request document submitted by Tenorio] at all. We’ve asked to work with the treasurer when she was requesting a forensic audit, to meet with her and see what it is specifically [she wants to know] because I know all of the different systems that the offices use.”
Villareal-Alonzo added that, statutorily, she is required to do an Internal Examinations Audit. “We are working on completing the treasurer’s audit. I’m waiting on her staff to get back with me,” Villareal- Alonzo said.
Tenorio said this audit should have been completed prior to her taking office, but Villareal- Alonzo said her office did not have December’s bank statements until January when Tenorio took office. Villareal- Alonzo also said her office is in the process of developing a countywide cash handling procedure.
Hays County Commissioner Walt Smith, Pct. 4, said what Tenorio was requesting was not an audit but a continuity of procedures.
“I know for four of the five years … I’ve been in office, our auditor’s office has gotten an exemplary rating, and we’re very proud of that,” Smith said. “On a daily basis, they do what’s being asked for in this audit.”
Smith said he has spoken to many elected officials and department heads, and none of them have viewed the auditor’s office in an adversarial manner.
“We don’t really need a review of a forensic audit. What we need is someone who can come in, evaluate each one of our areas of operations … and give us a true outline of where we have direct issues in our continuity of operations,” Smith said. “That continuity of operations guide stays within the county. ‘Here are the 50 things that are expected or anticipated in your job, and here are the things you need to do in order to get that done.’ That’s very different than what we’re looking at today.”
Tenorio said she will work with TAC to get the continuity plan started.
