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Concerns raised in county audit

By: Greg Bird

The summary of the report lists nine areas of concern found by the auditing team, which took a close look at the County’s financial records during their audit this past summer.

The annual audit of the McCreary County Fiscal Court for the 2012-13 fiscal year was released Wednesday by State Auditor of Public Accounts Adam Edelen.

The summary of the report lists nine areas of concern found by the auditing team, which took a close look at the County’s financial records during their audit this past summer.

The audit found adequate accounting records were not maintained to reasonably determine the accuracy of the Jail Commissary Fund and Revolving Loan Fund. It also stated the Fiscal Court did not follow general accounting principals, but did note their accounting methods did comply meet acceptable reporting methods.

Several comments regarding aspects of County operations were noted, with Judge Executive Doug Stephens addressing the concerns and noting what was being done to correct the issues.

The first recommendation was the Fiscal Court should improve procedures over disbursements; noting in a one-month period 28 invoices were found to have not been paid within a 30-day time period, incurring late charges on six of the bills.

Judge Stephens responded: “Timing of the receipt of invoices relative to the dates of the Fiscal Court meetings lead to some invoices not being paid within 30 days. We will work to pay bills in a timely manner to minimize this occurrence and avoid payment of late charges. We currently have in place general approval by Fiscal Court to pay utility bills as received.”

The next several comments center on the McCreary County Detention Center, and the commissary fund, the same topics noted in last year’s audit.

The auditors found accurate records were not being kept for the Jail’s Commissary Fund, including not maintaining a ledger for receipts and disbursements from the account, inaccurate bank reconciliations, and missing invoices.

Jailer Tony Ball issued a reply to the comments noting that a third-party software program was used to handle the accounts, and all receipts and disbursements were handled properly. He also stated he had no input when the Jail’s operating budgets were prepared.

Judge Stephens’ response stated the Commissary Fund was outside of the Fiscal Court’s authority until the closure of the Jail in 2012. After that point the Fiscal Court took over the account and began the process of determining where the funds should be disbursed.

Jailer Ball also commented on the missing invoices, noting: “An investigation by the State Police, instigated by me, was underway during 2012 regarding the possible missing invoices. The matter of the 6 missing invoices was under investigation and in  (December) 2012, the jail was closed and I have no access to records to be able to resolve this matter.”

The auditors also recommended the County Treasurer should maintain accurate financial records. “The financial records that are approved by the Fiscal Court have misleading information and overstate the financial condition of the County,” the report reads. “The County Treasurer is not following the County Budget Preparation and State Local Finance Office Policy Manual.”

Judge Stephens answered that the County has implemented a new financial management system, and stated he would ensure the Treasurer learn the new system, which would help improve the record keeping.

It is worth noting the audit covers the time period only up to June 30, 2013 and County Treasurer Donna Ross has since retired from the position. Mark Sewell has been hired to oversee the department.

The audit states the County’s Payroll account was found not to have been reconciled every month, noting there was a balance found in the account at the end of the fiscal year, while the balance should have been zero.

Other issues raised in the audit concern the segregation of duties and management of funds in County accounting and in local boards such as the Airport Board and Tourism Commission.

The final comment centered on the revolving loan program, noting it needs improvement.

“During our testing of the revolving loan program, we noted many of the loans are not current and no collection efforts were made on the noncurrent loans.”

Judge Stephens replied that the loan program has been revamped since he took office, and all current loans have the proper paperwork. He also noted the Economic Development Director has been in contact with inactive loan holders in an attempt to begin the process of recovering outstanding funds.

The full audit report can be viewed online at


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