Audit: County recorder’s office misused funds

The fund, called the County Recorder's Document Storage and Retrieval Conversion and Maintenance Fund, was established in 2001 and allowed counties with less than 750,000 residents to charge a $4 fee to help fund the conversion of hardcopy documents to electronic, automated computer storage systems.

However, County Recorder Carol Meier said the majority of those $4 fees are paid by title and loan companies that mine and sell information, and constitutes $300,000 of the Recorder's Office's annual $820,500 budget.

Aside from the special fund, the Recorder's Office budget is sustained by $325,000 in voter registration fees and $195,500 budgeted by the county, recorder's office staff said Monday.

Meier said the $769 in travel reimbursements noted in the audit was paid to employees to attend system operation and maintenance training courses.

The county's most recent budget shows the $146,000 employee salaries paid through the fund in 2013 consists mostly of salary expenditures, then health care and retirement costs, and other benefits.

Financial Services Director John Timko drafted an agenda item for Monday's meeting proposing the board of supervisors take action disallowing travel and employee expenses, as stated by the Auditor General to offset those revenues.

Meier defended the expenditures Monday, saying system "maintenance" can be interpreted to mean staffing costs, such as redacting personally identifying information from the hardcopy documents being added to the electronic system.

Meier said that is necessary to combat rampant land fraud in the area, for example.

"We had a gentleman call us, upset because his property was for sale on Ebay," Meier said. "It happens all the time."

The Auditor General's Office recommended in the report that the county evaluate expenditures paid through the fund in past years, as well, to ensure that the costs charged comply with the law, and that the county reimburse all unallowable costs through its general fund.

Since the auditor general found the Recorder's Office's expenditures to be improper and inconsistent with the state program, the onus is on the county to reimburse program dollars.

Timko said travel and employee expenditures have been in place, and paid through the fund since before he served as finance director, and were never classified as misappropriations in past audits.

Timko said the county has no obligation to replenish past expenditures through the general fund, since past audits found nothing irregular about the travel and employee expenditures, and said the Auditor General's report took a more narrow interpretation.

"If any of the auditors previously had told us, we wouldn't have done that those prior years, so we're not going to go back and pay for what was looked at during prior audits," Timko said. "That would be improper. As the finance director, if those expenses had not been approved by previous auditors, they would have never been in the budget this year."

Mohave County Board of Supervisors voted to postpone any decision Monday and said they would like to have their legal staff review the matter first, which the Auditor's General report also recommended, to ensure accountability with public funds and compliance with the law.

The county has until June 30 to take corrective action, according to the audit.