State auditor releases Ag Society audit report

FINDLAY — The Ohio State Auditor's Office has released the 2023-2024 financial audit of the Hancock County Agricultural Society, detailing recurring weaknesses in financial reporting as the fair board continues to undergo a separate forensic audit by the auditor's Special Investigations Unit. The report dated April 20, but publicly released Thursday, issued a material weakness after auditors found multiple errors in the society's 2024 financial statements. According to the audit, "federal grants were incorrectly classified as state support," and several categories of receipts and disbursements were either understated or overstated. "These errors were the result of inadequate policies and procedures in reviewing the financial statements," the report reads. "Failure to complete accurate financial statements and notes to the financial statements could lead to the board making misinformed decisions … In addition to these errors to the accompanying financial statements, the inadequate policies and procedures in reviewing financial statements also resulted in the society requiring the assistance of an outside accounting firm to correct the errors and achieve accurate reconciliation of book to bank balances for the audit period." Auditors also identified approximately $35,000 in cash reconciliation errors, calling the reconciliation process "the most basic and primary control" to detect accounting mistakes, theft or fraud. "Lack of completing an accurate and timely reconciliation may allow for accounting errors, theft and fraud to occur without timely detection," the report said. Moments after the state released the findings, the Agricultural Society issued a statement saying the board was "pleased" with the results. "The report upholds our ongoing position that our financial records are solid and above reproach," said Jeff Beach, Hancock County Agricultural Society vice president. The board acknowledged the misclassification and reconciliation errors, but said they had been corrected. The release also cited findings from CliftonLarsonAllen, an independent firm hired before the state audit, and said the society has strengthened oversight, reconciliation practices and internal procedures. Hancock County Commissioner Jeff Hunker expressed concerns during Thursday's commissioners meeting, saying the board's interpretation of the audit differed from his own reading. "In this report, it was mentioned, the result of inadequate policies and procedures in reviewing financial statements," he said. "Numerous situations where funds were put in different funds and basically what they are saying is that a lot of what they found was non-conclusive." Commissioners will discuss next steps, including whether to continue withholding the society's share of bed tax revenue. The county stopped releasing those funds in August while awaiting the state audit. Although commissioners renewed the funding agreement in December with added stipulations, no bed tax money has been released since. The reported findings were released after a financial audit of the fair board's financial records. Representatives of the Ohio State Auditor's Office have said this type of audit is most commonly performed on public entities to ensure financial statements comply with Ohio Revised Code and accepted accounting practices by reviewing records, internal controls, receipts, disbursements and account balances. The state's findings follow a turbulent period for the fair board. A 2022 audit uncovered hundreds of thousands of dollars in errors and resulted in the society being declared "unauditable." Commissioners are expected to review the new audit before deciding whether to resume bed tax funding.