Turnover in Benton County’s accounting office contributed to financial statements being misstated by hundreds of millions of dollars, according to state auditors, who also found the county failed to monitor millions of dollars in Covid-19 relief funds and submitted outdated data in place of a required financial report.

The findings come from two recent reports from the Office of the State Auditor, which looked at 2023 and 2024 financial statements from the county. Auditors said the county needs to strengthen its internal controls to ensure that its financial reporting is accurate and that it can ensure state and federal funds are appropriately spent.

The county “continues the work of improving our financial reporting processes following significant staff turnover and a major software conversion,” county officials said in response to the state auditor’s findings.

“The county remains committed to strengthening internal controls, improving the quality and reliability of our financial reporting and maintaining strong accountability to the public,” the county said.

State auditors looked at financial statements between Jan. 1, 2023, and Dec. 31, 2024, for an accountability audit.

Despite county officials certifying that they submitted full and accurate reports by the deadline, they instead filed older financial statements from 2022. Auditors said the county also failed to respond to its requests in a timely manner.

In their response to the audit findings, county officials said auditors advised they could submit older data as a placeholder until the reports for the correct fiscal years were ready. They also uploaded updated data as it became available.

“Our intention was to maintain transparency and help keep the audit process moving,” the county said. “We now understand that uploading data before it is fully complete is not acceptable, and we have adjusted our internal processes to ensure that future submissions are only made once all financial information is final and ready for audit.”

In an audit of selected federal programs focused on Covid-19 financial aid in the 2023 fiscal year, auditors said they found a lack of internal controls and failure to comply with federal requirements.

The county paid $2.9 million to eligible households for rental assistance from one program. Auditors reviewed a portion of those payments and found the county paid more than was eligible for some residents who only self-reported their rent payment without documentation and said the county made $5,670 in overpayments, projecting nearly $83,000 more based on sampling.

In a separate federally-funded Covid-19 program, the county passed on $4 million to organizations to provide financial assistance for homes, businesses and infrastructure projects. However, county officials failed to monitor one fund recipient that received $1.8 million to ensure it met federal requirements, including that the businesses aided were eligible.

Auditors found a lack of internal controls to ensure accurate financial reporting when it came to funds the county managed as a trustee for other entities or special districts, as well as capital assets, in the 2023 fiscal year.

That led to inaccurate reporting of fund revenues and expenses. In one case, the External Investment Pool had its revenues and expenses underreported by $344.5 million and $342.9 million, respectively. Custodial fund revenues were underreported by $46.1 million and its receivables overreported by $46.9 million.

The county also continued to record nearly 80 building assets as having an acquisition value of $29.2 million that had otherwise fully depreciated.

While the county corrected most misstatements, errors tied to fully depreciated capital assets remain unresolved.

Auditors attributed the issues to the county moving too quickly to prepare the reports following delays in a prior audit.

“As a result, the county did not provide its staff with sufficient resources, including time or training, to implement changes, prepare complete and accurate financial statements and perform a thorough review of its financial statements before audit,” according to the auditor’s report.