ONLY ONLINE: State auditors questions some of Knox Fiscal Court’s financial practices

An audit report released Friday questions several financial practices of the Knox Fiscal Court, including undocumented credit card purchases.

The report, released by Kentucky State Auditor Crit Luallen’s office, noted that a random sampling of 12 credit card statements, totaling $19,317, revealed that $6,053 in credit card expenditures were not adequately documented.
Some of the expenditures in question were for travel, meals, or miscellaneous supplies.

According to the report, auditors inquired of the finance officer to see if vouchers existed to support the expenditures dealing with travel or meals, and were told that no such files exist.

However, Knox Judge Executive J.M. Hall said that when he and other county officials attended a conference, the pre-registration fees are often put on a credit card. "They take our credit card and put the fees on that, but we don’t have a receipt. But the invoice shows what it’s for," he said. "We just didn’t have a receipt to put with it. There is no money missing and it’s not for anything improper."

In addition to the credit card expenditures, the audit also claims that some invoices for services and goods were not paid in a timely manner.

Of 69 invoices selected by auditors for testing, three invoices totaling $107,141, were not paid within 30 days as required by
Kentucky law.

"That was for blacktop. By the time we received the bill on that blacktop it was close to being near the end of the 30 days," Hall said, adding that by the time the county processed paperwork to get their blacktop subsidy back from the state, it was past the 30-day period. "We had to get the bills and send them to Frankfort. Those are bills that we are reimbursed for from Frankfort."

A portion of the audit said the county should incorporate any future Knox County Hospital bond default obligations in its budget, referring to a time last June when Pacer Health defaulted on a hospital bond payment at which time the county had to make the payment.

Hall said he doesn’t understand how the county can be required to budget for a bond default payment before it happens.

"They are saying that any future defaults we could have should be budgeted," he said. "We can’t budget for that. I argued with them pretty good on that. How can we budget for a payment that you don’t know you’re going to have."

Regarding a suggestion that all county officials be provided with the same level of insurance as elected officials, Hall said, "Ever since I was coroner in 1993, they wrote us up for that same thing. The county officials have a family plan insurance while the county employees have a single plan. They are saying that you should offer the same level of coverage for both, according to a Kentucky Attorney General’s opinion.

They are saying there is no difference, in the AG opinion. In Charley Greene Dixon’s opinion the state already separates county employees from elected officials."

Hall said that when he was coroner in 1993, he had family plan insurance. "That has been going on for years, and they write it up every year."

Hall said he is pleased that the audit was done and pleased to get comments on it.

"The reason I am pleased is that because since I’ve been there for the last three and a half years, we’ve not had an opinion. They have always said they could not give an opinion because the risk of fraud was too high. We couldn’t borrow money or anything because we didn’t have an opinion. I think it is positive because this is the first time they have given us an opinion since I’ve been there."

Hall said he welcomes annual audits. "I want them to do one every year and keep us up to date, instead of just doing one every three years. I want them to go ahead and start my 2010 audit now."