Auditor: county's purchase improper

Jefferson County improperly purchased its new dispatch computer software, according to a test done by external auditors.

The report on procurement tests, part of the audit report by Ciaschi, Dietershagen, Little, Mickelson & Co., Ithaca, was explained to the Finance and Rules Committee of the Board of Legislators on Tuesday night.

The county bought the $900,000 system, including six years of maintenance, at the end of 2009 from Spillman Technologies Inc., Salt Lake City.

Under General Municipal Law, the purchase should have been bid because it totaled more than $20,000, said D. Leslie Spurgin, audit partner with the firm.

"The response from management was that they believed it was professional services and didn't need to be bid. That was not the response I expected," Ms. Spurgin said.

She said she had thought administration would say the purchase was part of a lengthy process that included interviews with vendors and estimates.

"It was passed by the board, so we are ultimately responsible for it," said Scott A. Gray, R-Watertown, Finance and Rules chairman. "But this doesn't settle well."

He asked whether the offense would be reported to the state or result in a hand-slapping.

"It will probably end with getting your hand slapped," Ms. Spurgin said. "But state agencies will see it and ask for a response."

Mr. Gray said, "This is critical because of ongoing discussions about processes here."

County Attorney David J. Paulsen asked, "Is it your position that no software can be considered a professional service?"

Ms. Spurgin said, "It is a good."

Mr. Paulsen replied, "My research would indicate otherwise."

The auditors gave an unqualified opinion of the financial statements and saw no major issues on internal controls according to government auditing standards.

Other minor issues included the need for on-site monitoring with money the county passes to Lewis County in the Workforce Investment Board accounts. Records by the Solid Waste Department are not being updated daily, which the auditor has recommended changing in previous reports.

The county has about $30 million in fund balance. About $10.7 million is "unreserved, unappropriated" while another $19.3 is considered "management designated."

"That's a comfortable place to be," Ms. Spurgin said. "That's 17 percent of the budget appropriated last year."

Mr. Gray said, "But that would include sales tax payments to the towns, which are a pass through."

That drops the expenses to about $152 million and the fund balance represents about 20 percent of what was spent by the county last year.

"It's still within reason," Ms. Spurgin said. "You should be very happy to have a good fund balance going into these times because we don't know what is going to happen to state aid."