By Joel Hall
According to the state, a failure by the Clayton County government to properly submit a 2007 audit report is blocking the county's access to potentially hundreds of thousands of dollars in state funding.
Since July, the Georgia Department of Audits and Accounts (GDOAA) has blocked the county's ability to receive state-funded grants, due to non-compliance with its FY2007 audit report. The information surfaced last week as the GDOAA granted the county's request for a six-month extension on submitting its FY2008 audit report.
According to Ed Blaha, director of GDOAA's nonprofit and local government audits division, the GDOAA received the county's FY2007 audit report one week after the Dec. 31, 2007 due date, with significant errors.
After several months with no response from the county, the GDOAA -- the agency to which other state agencies refer to confirm that county and municipal governments are in compliance to receive state funding -- put the county on its black list.
"We've got the 2007 report and reviewed it, and we noted some items that need correction before we can actually accept the report," said Blaha. "On March 6, [we sent] the first letter letting them know that there were problems. We didn't receive a response so we contacted the county with another letter that was dated July 18.
"When we sent that July 18 letter, any state agency that would have contacted us to ask us if they were in compliance, we would have said no," Blaha continued.
Among errors noted in the county's FY2007 audit report were: Failure to submit an internal control report, which shows that measures have been taken by the county to ensure a speedy and accurate audit process; failure to disclose hotel and motel tax revenues and expenditures; failure to provide grant certification forms for two separate grants; and failure to submit a schedule of Special Local Option Sales Tax (SPLOST) projects along with the opinion of an independent auditor.
On Oct. 30, Blaha sent the Clayton County Board of Commissioners (BOC) another letter informing them that state grant funds would be "suspended until your audit report is accepted" and that the GDOAA would "notify other state agencies to suspend the transmittal of state grant funds."
Blaha said the county's non-compliant status would not interfere with federal grant money, such as the $9.7 million the county recently received from the U.S. Department of Housing and Urban Development (HUD) to combat foreclosures. However, state-funded grants, such as Local Assistance Grants and some road improvement grants through the Georgia Department of Transportation (GDOT), could be affected, he said.
Eldrin Bell, BOC chairman, said he worries that the non-compliant status may interfere with several road projects, and possibly cause the county to lose its bond rating. He said the county is working diligently to correct the problem and wants to start by having a performance audit of the county finance department.
"It could be devastating," said Bell. "We had a number of grants through the DCA [Georgia Department of Community Affairs]. We are responsible for giving [the GDOAA] reports, some on a quarterly basis, some on an annual basis, and, somehow, we have neglected to do that. They didn't even have the 2007 [audit report], let alone the 2008.
"We need to have a performance audit on our [finance] department to make sure that our board has adequate information to make financial decisions on a regular basis," said Bell.
Blaha said local governments are required to submit proper audits to the GDOAA to guarantee state grant money is being used for its intended purposes and that the county will be deemed non-compliant until it corrects its FY2007 audit report.
However, Blaha said the GDOAA is reviewing information intended to correct the matter submitted on Nov. 21 by Clayton County Finance Director Angela Jackson.
"With money being so tight, every revenue source is significant," said Blaha. "Loosing this funding stream could have a big impact on them. I spoke with Angela Jackson before Thanksgiving and they are moving to resolve these deficiencies."
Jackson did not respond to phone messages and e-mail correspondence sent on Monday.