NEW CUMBERLAND, W.Va. - A four-year state audit of the Hancock County Parks and Recreation Board could not account for tens of thousands of dollars in payroll, marina and vendor expenses.
The audit, which covers the fiscal years 2009 through 2012, concludes that the board failed to maintain adequate financial records and internal controls for those years, so much so that the West Virginia State Auditor's Office was unable to express an opinion on the agency's financial health.
"The scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements," State Auditor Glen B. Gainer III said in his report.
The audit's scope was hindered, Gainer notes, because "we were unable to obtain sufficient competent evidence supporting the financial activities of the Hancock County Parks and Recreation Board."
In its report on internal controls, the audit noted 11 areas where the board was deficient. Four of those areas were characterized as "material weaknesses," or deficiencies where there is a "reasonable possibility" that financial misstatements will not be prevented or detected.
The audit was unusual in that it covered four years; state audits of county agencies usually are conducted on an annual basis. In its annual audits of Hancock County commissioners, the state auditor's office noted that, for fiscal years 2009, 2010 and 2011, county financial statements did not include financial data for the Parks and Recreation Board.
"We didn't realize there wasn't an audit performed," Commissioner Jeff Davis said. "The Parks and Recreation Board had their own accounting firm that was to do audits for them, and those had not been turned into the state auditor."
Davis said commissioners were made aware of the discrepancy last year, at which time "the completed (internal) audits were given to the state auditor."
In addition to the audit, the state auditor issued a special report that has been given to Hancock County Prosecutor Jim Davis, who would not rule out presenting the information to a grand jury in January.
"At this point, I don't know. Anything's possible," Jim Davis said.
The prosecutor declined to discuss details of the special report but said, "Obviously, agencies should be keeping closer tabs. Four years is a long time to go without figuring out, financially, what's happening."
Commissioners Davis and Dan Greathouse said they could not comment on the audit because they had not seen it. "I'll definitely be looking into it when I get back into town," Davis said.
New Parks and Recreation Board President Thomas Keller is recovering from surgery and was unavailable for comment.
The audit, which was begun in March and recently posted to the state auditor's website, cited the Parks and Recreation Board for, among other things, poor record keeping, failing to enforce policies governing revenue receipts at Kennedy Marina and Campground in Newell, neglecting to collect state sales tax on goods sold at the Kennedy Marina gift shop or on camp site rentals, and providing lax oversight of disbursements.
The report on internal controls said that, in the four years covered by the audit, Parks and Recreation Board employees "appeared to receive" $91,260 in compensation in excess of that reported to the Internal Revenue Service.
"Board officials have not ensured adequate controls and procedures over the payroll functions," the report said. "Officials failed to establish policies and procedures to ensure that employees are compensated only for hours worked."
The report also said auditors could not account for $31,249 in Kennedy Marina revenues between 2009 and 2012. The revenues had been recorded in the computerized receipt system but could not be traced to cash deposited into the bank, the report said.
"Board officials failed to establish and enforce policies and procedures governing revenue receipting for goods and services provided at Kennedy Marina," the report said. "Transactions are not properly recorded, and control over collections is compromised."
Hancock County commissioners removed Kennedy Marina from Parks and Recreation Board authority earlier this year. It is now operated by a private contractor who shares revenues with the county. Commissioners still are awaiting final approval of the contract by the National Park Service.
In a third area, the report said auditors could find no IRS documentation for $25,215 that had been paid to vendors for services to the board between 2009 and 2012.
"Controls, which ensure proper IRS reporting, were not adequate," the report said.
The report also said the board "failed to maintain an adequate record of certain transactions which took place during the year," including itemized claims for each expenditure, deposit records, receipts for all revenues, and details of employee salaries and hourly wages.
The report said the board also neglected to maintain meeting minutes for public inspection. Auditors were hampered in their investigation, the report said, because of either poor record keeping by the board or the lack of adequate records.
The Parks and Recreation Board oversees Clarke Field in Newell, Lawrenceville Park, the Gas Valley Road sports complex and the Cove Valley playground near Weirton. The board's budget comes primarily from the state's hotel/motel occupancy tax.
Revenues from the 6 percent tax are split evenly between Hancock County and the Top of West Virginia Convention and Visitors Bureau, which incorporates Hancock and Brooke counties and the city of Weirton.
Parks and Recreation gets about $50,000 a year from the hotel tax for basic operations and maintenance. Capital improvements are usually covered by commissioners.
Since Kennedy Marina was removed from the board's oversight, the commissioners' monthly allotment to the board has dropped from $4,200 to $2,200, Jeff Davis said.
"The park board submits their requisitions, and we pay those requisitions from the $2,200," he said.
The accounting change occurred around the same time commissioners reorganized the Parks and Recreation Board, reappointing five members and adding four new members.
Current board members are Tom Keller (president), John Adkins (vice president), William Miller (secretary-treasurer), Wilma Boring, Billy Pryor, Rick Smith, Albert Jesse Mestrovic III, and Karen LaScola.