Published: May 14, 2008 11:07 am            

Auditors urge monitoring of revenue & grant funds

Areas of non-compliance suggested for review

WHITLEY CITY — More than six months after their initial completion, state auditors last week released two years worth of audits which examine the practices of McCreary County Fiscal Court.

Taken together, the county audits covering the fiscal years 2003-2004 and 2004-2005 found dozens of problems with the county's accounting practices, some of which are being referred to the Governor’s Office of Local Development and/or the office of McCreary County Attorney Phil Chaney for possible further action:

• All Court-Ordered Fees Should be Collected by the Circuit Clerk’s Office. Auditors found the county treasurer (Donna Ross) collecting court-ordered jail fees and depositing them into the county’s Jail Fund. They were unable to determine either the exact amounts collected or who authorized the collection. In accordance with the Adminis-trative Office of the Courts, all money ordered by a district judge should be received by Circuit Clerk (Othel King) before being paid to the County Treasurer.



• The Duties of the County Treasurer Should Not Be Delegated.



Occurring in both fiscal years, Ross delegated significant duties to a non-county employee not covered by bond.



• The Fiscal Court Should Notify State Local Debt Officer of Intent To Borrow.



In October 2004, the county borrowed $70,030 for General Fund payroll expenses. The following March, the county refinanced for $100,000 with the balance applied to the settlement of a lawsuit with a contractor. The county could not provide documentation that they notified the SLDO in writing as required by KRS 65.7719.



• The County Treasurer Should Accurately Record Receipts and Disbursements.

Affecting both audits, checks were improperly posted as expenditures in FY 2004 but were not written until after June 30, 2004. Similarly, a $30,000 cash transfer dated July 1, 2005, from the General to Jail Fund improperly recorded on the FY 2005 financial statement resulted in a cash shortage of $23,151 in the Jail Fund as of June 30, 2005.



Other recommendations called for proper monitoring of federal grant subrecipients and better accounting practices among specific semi-government agencies including the McCreary County Solid Waste Management Board, Tourism Commission, Airport Board, Stearns Historical Area Development Authority, and Sandhill Conservation Camp Board.

In the FY 2004 audit, the county was also written up not reimbursing the road department for fuel used by other county agencies as well as McCreary Search and Rescue. As of June 30, 2004, a total of $28,284 was expended from the road fund for fuel with only $5,948 having been repaid.

“Corrective steps will be made to be in full compliance and payments made where applicable,” McCreary County Judge-Executive Blaine Phillips responded.

The FY 2005 audit found an instance in which an additional $20,741 in occupational tax revenue had been transferred to General Fund with only $4,520 attributed to park operations as required by ordinance. The Jail Fund, which is supposed to receive 10 percent, received $7,580 too much.

Though Judge Phillips responded that the problem would be corrected, he acknowledged yesterday that covering bills can make it difficult.

“The jail needs more than 10 percent but to up it would take away from the other allocations,” Judge Phillips said.

Auditors also advised fiscal court to review its administrative code annually as required by KRS 68.005(2).

“We can always improve, as with reviewing the administrative code,” Judge Phillips said, “but there wasn’t anything that really bothered me about the findings. They went through thousands of entries and what they came up with wasn’t that bad. It was more run-of-the-mill housekeeping issues. I was pleased with the audit.”

        

• Click to discuss this story with other readers on our forums.