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Treasurer’s Office – is the audit an audit?


By Michael Howell

Many people are wondering about the ongoing audit of the Treasurer’s Office. It appears that a lot is hanging on the outcome of the process. Members of the public, County Commissioners and the County Attorney have all expressed frustration over the situation in which the Treasurer remains on paid administrative leave pending the audit’s outcome. Many people are wondering why it is taking so long. At least one citizen, Chris Hockman, is wondering if there is even an audit going on, or if it is not, in fact, simply an “examination.”

Hockman spoke up at the meeting where the County Commissioners considered instituting an investigation into activities at the Treasurer’s Office and Treasurer Valerie Stamey’s allegations. County Attorney Bill Fulbright called it an “awkward situation” because he had already instituted two investigations the previous day out of his office. One was for retired Judge Nels Swandal to investigate Stamey’s allegations and the other was an “audit” of the Treasurer’s Office by the auditing firm Anderson-ZurMuehlen.

Hockman asked at the time if the audit being commissioned would fall under the laws of the state’s Single Audit Act. Fulbright said it would. Hockman thought that was significant because it opened up the possibility of suspending the Treasurer without pay if something significant was discovered. If she were proven in the end not to have violated her duties she would be reinstated with back pay.

With so much potentially hinging on the results of this audit, Hockman wrote to the Commissioners on April 24th asking them to note that Mr. Woy (of Anderson- ZurMuehlen) at no time refers to his efforts as an audit of the Ravalli County Treasurer’s Office.

“In all correspondences that I have been able to view, Mr. Woy refers to an independent examination of the Ravalli County Treasurer’s Office. If the public is expecting a special audit, I believe they will not receive one. The public will receive an independent examination, something different,” wrote Hockman.

He advises the Commissioners to “refrain from publicly referring to the efforts of Mr. Woy in the Ravalli County Treasurer’s Office as an audit. This distinction is significant and as explained to me, has legal repercussions.”

Director of the state’s Department of Administration, Kay Gray, confirmed the fact that what Woy was doing was not an audit as defined under the Single Audit Act. She said the county was audited every year under the Single Audit Act and the Department of Administration was a third party to the audit. She said there were provisions in the law to perform a “special audit,” between the annually scheduled audits, if there was a need and these “special audits” would also fall under the Single Audit Act and the department would be a third party to the audit. She said the work being done by Mr. Woy of Anderson-ZurMuehlen was being done under contract with the County Attorney and the state was not involved. She said the result of the work would be the property of the County Attorney’s Office and he would probably do whatever he thought best with the information.

County Attorney Bill Fulbright suggested that the Bitterroot Star contact Woy directly for an answer to the question about whether his work was an audit or not.

Woy told the Bitterroot Star that there is often some confusion amongst the public about the term “audit” because there is the ordinary understanding of what an audit is and then there is the determination of what an audit is under the Single Audit Act. He said that he was doing an audit of the Treasurer’s Office in the sense in which people ordinarily understand it, but that it was not an audit under the Single Audit Act.

He said an auditor forms an opinion about the veracity of financial statements. “But we are forming an opinion on subject matter, in this case the Treasurer’s Office, using attestation standards,” said Woy. He said not to let the term “examination” be taken as a form of “lesser engagement” than an audit. He said they were carefully following attestation standards and would produce an opinion and account of the status of the Treasurer’s Office that will answer people’s concerns about the status of the office.

Although Woy’s letter of engagement with Fulbright refers repeatedly to doing an “examination” and “consulting” work, it also refers specifically to doing an “audit” as well.

“We will audit the schedule of cash items as of January 24, 2014 and the schedule of reconciled agency accounts and County cash accounts as of January 31, 2014,” Woy states in the letter. He also states that the examination “will be conducted in accordance with lawful fraud examination techniques.”

“It is understood and agreed that Anderson ZurMuehlin & Co. P.C. services will include advice and recommendations, but all decisions in connection with the implementation of such advice and recommendations shall be the responsibility of, and made by, the County Attorney,” states the agreement.

Why has it taken so long?

Woy said the workload was a direct reflection of the amount of work that had not been done at the Treasurer’s Office. He said the amount of work was staggering and could not be done in a week or even a few weeks. He declined to make any predictions as to when his work would be completed.


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