County audit finds gaps in accounts-receivable documentation; Emergency Services shows improvements but procurement controls need work

Johnson County internal auditors presented two performance audits to the Board on Jan. 16 that identified documentation gaps and control weaknesses and prompted management to promise corrective steps.

Countywide accounts receivable: John Halliday of Audit Services reported that while departments generally adhere to the county’s procedures, Administrative Procedure 170 (accounts receivable) is outdated and not all 12 departments that operate decentralized receivable functions have fully documented billing and collection procedures. Halliday said the procedure lacked some GFOA-recommended elements, including mandatory training and scheduled reviews, and noted that the procedure still referenced an earlier organizational structure. Management concurred and Treasury/TTV told the board it is updating Procedure 170, adding training and documenting approvals for departments that maintain their own receivable processes.

Department of Emergency Services (DES): Interim County Auditor Michelle Cleveland presented a performance audit of DES following the 2021 merge of emergency medical services, emergency management and communications. The audit found the department had substantially improved 911 fund administration — including reconciling the fund and establishing executive-committee bylaws — and that payroll controls were generally sufficient. The audit reported, however, that accounts-receivable controls for the Emergency Communications Center (ECC) and emergency management divisions needed clearer procedures for reconciling receivables, collecting past-due accounts and establishing fee schedules.

Cleveland reported that emergency medical services accounts receivable exceed $16,500,000 and account for roughly 98% of DES revenue. The audit also flagged procurement and purchase-order practices: 87% of purchase orders (by count) valued at over $8,500,000 were created after an invoice to pay was received for vendors during 2022–2023, a pattern auditors said increases the risk of noncompliance with county purchasing policies and of fraud, waste or abuse.

DES leadership, including Director Paul Davis and administrative lead Debbie Addict, told the board that the merged divisions inherited limited documentation and vacant administrative positions and that management prioritized reconciling the 911 fund and stabilizing operations. Addict explained the department’s use of confirming purchase orders for certain logistics and medications: “Because of different drug shortages and supply shortages and things to that nature, sometimes we have to order from multiple vendors at the same time, ordering the maximum quantity allowed, not knowing when we are gonna get those quantities in,” she said. DES said it has implemented compensating controls and is developing written procedures for contracts, purchasing and accounts receivable for ECC and emergency management divisions; management concurred with the audit recommendations and provided target completion dates in the management response.

Board members asked for follow-up. Commissioners noted the audit committee provides quarterly updates on open recommendations and requested that staff track reductions in confirming purchase orders and report back on implementation progress.