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Audit reveals accounting difficulties at fair office

Mona Hill
Staff Writer
2/9/2011

In the face of a significant revenue shortfall and urgent repairs, the Plumas County Board of Supervisors received more bad news about Plumas-Sierra County Fair’s accounting practices.

Auditors from the California Department of Food and Agriculture’s (CDFA) Audit Office found five areas of concern in Plumas-Sierra County Fair’s accounting practices in its audit, dated Oct. 29, 2010, for the 2009-10 fiscal year.

Those concerns are considered weaknesses in the fair’s operations and include its statement of operations reporting, cash accounts, fixed asset accounting, deferred revenue and admissions revenue. The auditor’s deferred revenue finding is a repeat finding from prior years.

The audit report painted a picture of inconsistent and often incorrect accounting practices by fair staff. Staff members maintain separate records using QuickBooks, a commercial accounting program for small businesses.

Auditors cited examples of errors in accounting entries to QuickBooks, discrepancies between county and fair records and errors in financial reporting.

The CDFA report to the Plumas County Board of Supervisors included matters that could have a significant effect on the fair’s financial reporting process, including significant audit adjustments.

In addition, auditors found areas in which the fair was not in compliance with state laws and regulations, the accounting procedures manual and established policies and procedures.

The CDFA auditor recognized the challenges of a small fair staff on the degree of segregation of duties. The management letter suggested fair board oversight was critical for proper internal financial controls and reporting.

In his written response to the report, fair manager John Steffanic addressed the auditors’ findings with assurances of correction.

Steffanic alluded to incompatibility between county and state accounting. He said fair staff bridged the two systems with QuickBooks, which “shows every sign of solving the problem” despite creating a “few inaccuracies until we smooth out the details.”

The fair manager said fixed asset recordkeeping was a problem predating his tenure as manager. He assured the state’s Audit Office the fair’s property ledger was complete and up-to-date and he was working with the county to update its list.

Steffanic’s letter concluded, “We feel we’ve made good progress; there were less findings this year than in previous.”

As of press time, Steffanic was on the agenda for the Feb. 8 supervisors’ meeting to request approximately $30,000 be transferred from the county’s contingency fund for high voltage electrical repairs. The transfer will require a four-fifths vote of approval from the supervisors.

In addition, the county’s chief administrative officer (CAO), Jack Ingstad, estimates the fair will need approximately $70,000 more to finish the fiscal year, which will also require a four-fifths approval vote from the supervisors.

Between the electrical repairs and the revenue shortfall, the fair will need about one-quarter of the county’s contingency fund.

Given Governor Jerry Brown’s proposed cuts to all California fairs, Ingstad and Steffanic were not sure how the fair would go forward from this point. Both are certain there will be a fair, just not how it will be organized.

The fair manager and the CAO agree that it’s important for the county to keep the fairgrounds operating as an event venue.

 


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