County audit battle continues

by April Scheinoha

    As the battle continues regarding Pennington County’s 2015 audit, commissioners heard the results of the county’s 2016 audit.  Colleen Hoffman of Hoffman, Philipp & Knutson PLLC presented the audit at the County Board meeting Tuesday, Jan. 23.
    Hoffman said the county’s net position decreased in 2016. She attributed the decrease to the effect of new requirements from the Governmental Accounting Standards Board. The county is required to recognize its net pension liability on its balance sheets. In 2015, that number was $3.4 million. The following year, it grew to $5.2 million. Substantial increases were seen in the net pension liability for police and fire, and corrections. Hoffman anticipated the net pension liability would decrease in 2016.
    County audits have been in the news lately. By state statute, counties can hire private firms to conduct their annual audits.  State Auditor Rebecca Otto is challenging that law. Her appeal is now before the Minnesota Supreme Court. Hoffman was formerly employed in the State Auditor’s Office, which is now led by gubernatorial candidate Otto.
    The 2016 county audit was delayed after the State Auditor’s Office determined Hoffman’s firm didn’t provide enough research to reach the conclusions listed in its findings for eight 2015  county audits conducted by the firm. In the past, it was noted that the State Auditor’s Office found nothing wrong with the audit numbers.
    “We’ve had a little distraction this year,” Hoffman told commissioners.
    Besides Roseau and Pennington counties, affected counties include Clearwater, Hubbard, Kittson, Koochiching, Lake of the Woods and Red Lake. Five other private firms are in the same situation as Hoffman, Philipp & Knutson.
    After its research, the State Auditor’s Office  decided it needed to redo the counties’ 2015 audits. Late last year, State Auditor’s Office employees were in Pennington County to obtain information in order to redo the 2015 audit.
    Of the other five firms, Hoffman said one firm has resolved the problems related to that firm’s county audit. The report was reissued. The other four firms, including Hoffman’s firm, haven’t yet settled the issues cited by the State Auditor’s Office. “We’re just going along day by day dealing with this,” Hoffman said.
    Hoffman noted that Rep. Dan Fabian is adamant that the counties not be required to pay for the audits recompleted by the State Auditor’s Office.
    The issue with the State Auditor’s Office has led Hoffman’s firm to be reviewed by multiple agencies, including the Minnesota Board of Accountancy. “It’s going to be fine,” said Hoffman, who has worked in this field for 32 years.
    More than 1,000 hours have been spent resolving this matter, Hoffman said. She added that she is contemplating hiring an attorney if it is determined her firm did nothing wrong.
    County Board approved hiring Seth Vettleson as the chief deputy of the Pennington County Sheriff’s Office. Vettleson has been employed in the sheriff’s office for three years. Previously, he was employed for more than seven years with the Thief River Falls Police Department.
    Vettleson started his new position Monday, Jan. 29. He will be paid $30.43 per hour. Vettleson succeeds Ben Kuznia, who retired after 28 years with the sheriff’s office.
    County Board learned that the University of Minnesota Extension has approved hiring Sutton Stewart as the Pennington County 4-H Program coordinator. Stewart began his new job Monday, Jan. 29. He succeeds Van Swanson, who retired from his position in December.
    Commissioners approved hiring Amy Halvorson as the  Extension office manager. Halvorson, who is currently employed as the executive assistant at the Thief River Falls Chamber of Commerce, will begin her new job Thursday, Feb. 8. She has 14 years of experience in Pennington County 4-H. Halvorson succeeds Kim Swanson, who retired from the position in December. Halvorson and Stewart will work with Bill Craig, who also works in the Extension office located in Thief River Falls.
    Commissioners accepted the retirement of Dale Anderson, who is employed with the Highway Department. Anderson is retiring after 30 years with the county. His retirement is effective March 2.
    County Board gave County Engineer Mike Flaagan permission to schedule and advertise a bid opening for four 2018 projects, pending state aid approval. Bids are expected to be opened sometime in March.
    The projects include a mill and overlay of County State Aid Highway 3 from CSAH 17 to Highway 59; a mill and overlay of CSAH 20; improvements to the small road at the Multi-Events Center; and countywide striping.
    County Board tabled a motion for the sheriff’s office to lease a 2018 Ford Explorer. The matter has been referred back to the Law Enforcement Committee.
    If approved, the county would lease a Ford Explorer for $23.72 per day as part of a three-year lease. Sheriff Ray Kuznia said the lease is capped at 90,000 miles.
    All of the brown squad vehicles have close to 200,000 miles, Kuznia said. He noted the sheriff’s office would like an SUV since deputies travel in storms.
    Kuznia and commissioners questioned whether it would be better to buy a squad vehicle instead of signing a lease. However, Kuznia noted there was no money in his budget to buy this unmarked vehicle.
    In an interview with The Times on Monday, Jan. 29, Kuznia said he has since found money within his budget to purchase an SUV.
    After holding a public hearing, County Board approved tax abatements for nine properties. Tax abatements were approved for Shannon McCloskey, Kevin Brown, Kathryn Renwick, James and Ruthann Svir, Lois Bergland, Mark and Denise Borseth, Aaron and Deanna Joppru, Thomas Zingsheim and Tammy Jacka.
    The tax abatements totalled about $13,000 in county taxes. “This is the biggest group we’ve ever had,” County Auditor/Treasurer Ken Olson said.
    The parcels are in the first year of a three-year tax abatement program. The program provides a tax abatement for new single-family homes. The cost of home construction can’t exceed $160,000 for homes built before June 2015 or $200,000 for homes built after that time. The tax abatement only applies for the first owner occupying the home. As part of the program, the city of Thief River Falls approved city property tax abatements for the same parcels in December.
    County Board rescheduled its Tuesday, Feb. 27 meeting. The meeting has been rescheduled for 9 a.m. that day. Normally, the last County Board meeting of the month is held at 5 p.m. The meeting was rescheduled due to an Association of Minnesota Counties meeting.
    The next County Board meeting is scheduled Tuesday, Feb. 13 at 10 a.m. at the Pennington County Courthouse.