Six of the issues noted in the audit are exact or similar findings from previous audits dating back for at least the last four years.
The current audit, covering the 2015-16 fiscal year, noted 10 areas where improvements should be made in various accounting and management areas.
The first comment found the fiscal court did not have proper purchase and procurement procedures.
Among issues found by the auditors were six invoices without sufficient documentation, seven invoices paid late, 28 without a purchase order, one purchase order approved after the invoice was issued, and 16 late payments on debts.
Similar issues were noted in three of the past four audits.
Judge Executive Doug Stephens’ comments on the finding included that “measures will be taken to correct all the issues in this finding.” In previous audits the Judge’s comments noted changes have been made to the system to avoid such issues.
The second finding concerned not properly reconciling the payroll account. Auditors noted the last fiscal year ended with an unexplained balance of about $25,000.
The same issues had been noted in the previous four audits, and Judge Stephens acknowledged as much in his response:
“The payroll account has been out of balance for many years,” he said. “We have made every attempt to reconcile but past records are limited. Will plan to balance the account to a zero balance during this fiscal year.”
The third comment stated the fiscal court did not have sufficient internal controls over payroll. This finding was relatively new, as last year auditors noted the court needed to strengthen their payroll system.
Auditors tested 17 employees at random, finding one employee did not have a timesheet and two did not sign their timesheets. It was also noted that the magistrates and constables did not submit timesheets to justify their insurance and retirement benefits.
Stephens’ response to the first issues was that the “problems listed will be resolved.” As to the magistrates and constables, he noted they are elected officials, with no set schedule, and as such are not required to submit timesheets.
The fourth finding was the fiscal court did not have sufficient internal control procedures over credit card disbursements- another repeat finding from the previous four audits.
Auditors noted nine credit card charges were paid without supporting documentation, two charges coded to the wrong fund, three food charges were based on only a receipt instead of an itemized listing, none of the disbursements were accompanied by a purchase order and late fees were assessed five times.
Stephens’ response stated all credit card purchases are made with his approval, and that the County would make “every effort” to improve their documentation process.
Two comments concerned the USDA Grant agreement and the revolving loan program.
Auditors state they believed the matching funds provided by the County for the terms of the grant program should not come from repayments from the loans.
Judge Stephens responded by stating the money, once it has passed through the program, is eligible to be used for such a purpose.
Friday, during the Fiscal Court meeting Judge Stephens elaborated, noting that the USDA has given tacit approval that it is allowable, but admitted he is not able to secure that approval in writing.
On the loan program itself, the Auditors state, for the fifth consecutive time, that the fiscal court does not have sufficient monitoring or internal controls over the program.
While this has been an ongoing issue, the latest audit found fewer problems with the program than in the past.
Comment from the current finding note the fiscal court made “no attempt to collect payment on 21 loans totaling $737,928.” Additionally the schedules for repayment activity are incorrect in some cases and no report to the USDA was submitted in the fiscal year as required.
Judge Stephens’ response noted the work the County has done to bring the loan program in to compliance.
“This is a recurring audit finding and we are diligently working to remedy this issue,” he said. Additionally, he stated, all but three of the collectable loan holders had renegotiated their loans and the remainder will be pursued with legal action.
Auditors noted the fiscal court does not maintain accurate capital asset records; another finding that has been carried over for three of the previous four audits.
Stephens responded by saying: “We are aware of this issue and plan to properly maintain capital records henceforth.”
The ninth finding stated the fiscal court disbursements exceeded budgeted appropriations; noting the emergency dispatch fund exceeded the budget by $82,000.
Stephens responded that the Treasurer will provide line item budget transfers to the fiscal court to prevent the issue from reoccurring.
Auditors also noted the county lacks segregation of duties over all accounting functions: a common finding in all local audits as a lack of personnel makes it difficult to provide enough staff to satisfy the requirements.
The full audit can be found online at www.auditor.ky.gov.