The State Auditor’s office released the Pearl River County annual financial audit for the 2011-12 fiscal year.

The auditor’s office reported the county paid record restoration fees to the Chancery Clerk without a contract and noted that no county funds should have deficit fund balances.

Adrian Lumpkin, county administrator, said the work the Chancery Clerk was paid for electronically scanning old records into the system.

In the auditor’s report, it states the Board of Supervisors should have a signed, written contract with the Chancery Clerk. Lumpkin said the board meeting minutes show where the board entered into a contract with the Chancery Clerk.

“Our opinion is that we had a contract with the Chancery Clerk and it is in the minutes,” Lumpkin said.

The board’s official written response to the auditor stated, the “Pearl River County Board of Supervisors will meet with the Chancery Clerk and enter into a contract for future restoration fees,” to be effective immediately.

In regard to the state auditor’s note about deficit fund balances, Lumpkin explained when the county receives federal grants, the county must pay out of pocket first before being reimbursed.

Sometimes reimbursements are not distributed to the county before the end of the fiscal year, making the county appear to have deficit funds.

“On paper it looks like we don’t have money,” Lumpkin said.

He said the auditor’s office would like the county to have a separate account for grant funds to avoid the appearance of the county having deficit funds.

“We’ve been doing it like this for 5 or 6 years and this is the first time they’ve said it’s a problem,” Lumpkin said.

In the board’s response to the auditor, their corrective action plan will involve a board meeting with Lumpkin to “ensure that all necessary transfers to the grant funds are made at the end of the year to ensure no fund has a deficit balance.”

“These audits are designed to identify and correct any financial and compliance issues found within the county,” State Auditor Stacey Pickering said in a statement. “I thank Pearl River County for their cooperation during this audit.”