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WATCHDOG: County paid CPA firm nearly $56,300 for services

Posted February 19, 2015 10:00 pm

By Pete Spitler The Herald Tribune

CHESTER -- As part of its watchdog role, the Herald Tribune has been examining various financial records of governmental agencies.

According to information acquired by the newspaper from the Human Resources Department at the Randolph County Courthouse, the county paid the CPA firm of Schorb and Schmersahl, LLC a total of $56,298.04 in three checks issued during the past year.

The firm prepared the county's fiscal year 2015 budget at a total cost of $12,326.50. An invoice pertaining to the 2015 budget, dated January 5, 2014, from Schorb and Schmersahl had only two line items - a $12,000 preparation fee and $326.50 in out-of-pocket expenses in regard to mileage.

"I understand when someone says 'That's a lot of money,'" said Jim Schmersahl, the county's CPA with Schorb and Schmersahl. "There's a lot of CPAs that are down there tearing records and budgets apart.

"We spend hundreds and hundreds of hours working through this stuff."

Schmersahl said the payments are for a year and a half of services that include preparing a 78-page annual financial report that covers the 55 individual governmental funds Randolph County maintains.

"When we do the audit of the county, it includes an audit of all the county government services, all the offices, as well as the sheriff's department and the highway department," he said. "All those individual governmental activities get included in the audit."

Randolph County Commissioner David Holder, who is also the county's budget director, is a CPA himself.

"It really needs to go out to a third party person," said Holder, when asked if it would be a better financial option for the county if he prepared its budget. "I don't know if I would exactly call it a conflict of interest, but it would definitely be better to go through a third party person.

"In essence, I would be basically reviewing my own work and reviewing the work that I'm also, as a commissioner, voting on. So, it's definitely better to have a third-party auditor. I wouldn't want that responsibility."

A check for $35,804.66, issued February 14, 2014, was to cover the cost of a $20,000 general audit and a $15,804.66 fee for preparing the fiscal year 2014 budget.

"That one reduced back quite a bit this year because I did a substantial amount of that," Holder said regarding the budget preparation fee. "At the end, (Schmersahl) still brings a lot to the table.

"I want another set of eyes on (the budget), I don't want to be completely responsible for it; I want somebody else to look at it."

Holder said Schmersahl does other things like calculate anticipated state revenues.

"He runs some various other calculations in regard to state revenue," Holder said. "Where I'm just kind of looking at them from a general trend.

"He looked at it from the point of view of state revenues, property tax revenues (and) trying to do some advance calculations. The numbers were similar, but it's good to make sure you're somewhere reasonably close to it."

A check for $8,166.88, issued June 20, 2014 went to pay for two separate audits, including one for the Circuit Clerk's office in the amount of $2,500, and the financial statement of Anna Wehrheim Brown for $2,491.88.

"There's a general Randolph County audit, a small audit of the Anna Wehrheim Brown property near Ellis Grove, one for the Care Center, one for the Randolph County Health Department and he does a required one for the Circuit Clerk's office," Holder said. "It's not an audit of their expenditures or salaries, it's an audit of their handling of court funds within the Circuit Clerk's office."

Holder said the audit of the health department is one he wants to discuss with Schmersahl.

"I thought I wanted to discuss that with him, so we held back on it," Holder said.

Schmersahl said he takes a lot of pride in how his firm serves Randolph County.

"From 2013 to 2014, there were no fee increases," he said. "The county was talking about cutting people, so we voluntarily kept our fees flat."

Holder said $23,175 was the general cost of the county's audit in 2013 and 2014 and an amount of $23,850 is budgeted for the fiscal year 2015 audit that Schmersahl will be presenting to the Board of Commissioners on Friday.

"It seems right now that it is reasonable and not out-of-line," Holder said. "Auditors generally charge a couple of hundred dollars an hour, but I'm quite sure he is under that amount."

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