Audit finds county properly overseeing taxpayer money

An audit of the Whitley County Fiscal Court just released by the Kentucky Auditor of Public Accounts shows the county spent slightly more money than it took in during the 2013 fiscal year, but otherwise said the county was properly watching over the taxpayers’ money.

Officially released last week, the audit scrutinized financial activity in nearly the entirety of Whitley County government. On the accounting side, auditors found only one “material weakness” in the internal control over funds — lack of adequate segregation of duties over the Whitley County Detention Center’s canteen fund.

“The bookkeeper is primarily responsible for preparing deposits, daily checkout sheets, receipt and disbursement ledgers, writing and signing checks, performing monthly bank reconciliations, and preparing monthly sales tax returns. In addition, she does collect money and issue receipts,” auditors wrote in the report. “Although there is some documented internal controls there are still areas of concern: for example the bank reconciliations prepared and reviewed was not properly balanced.”

The weakness is a common one pointed out in many audits of city and county governments. And it was the only one auditors found over the roughly 14 funds and departments that operate under the Whitley County Fiscal Court, representing just over $15.5 million in revenue and disbursements.

Whitley County Judge-Executive Pat White Jr. said the audit should serve as comforting news to county citizens.

"We are very proud that this recent audit, once again, produced no negative comments against the Judge/Executive’s Office,” White said. "This is the sixth year in a row our audit has shown that we are being responsible with the tax payers hard earned money."

On the financial side, the audit did reveal that the fiscal court engaged in some deficit spending in FY 2013. It took in $15,570,362 in receipts but spent $15,644,900 — a deficit of $74,538.

Revenue was down $376,85 from the previous fiscal year.

Amber Owens, Director of County Projects for the Whitley County Fiscal Court, said the county did have a surplus from the previous year to cover the deficit spending. She said inflation; some unexpected expenses and the county’s efforts to replace its aging ambulance fleet are all reasons for the excess spending.

“I think it’s important for people to understand that we didn’t spend more than we have. It wasn’t that the money wasn’t there. We didn’t get a loan or anything to make up the difference. We had surplus from the prior year,” Owens said. The county did purchase two ambulances this past year, and Owens said plans are to replace more in the near future.

Budgetary overruns in individual funds and departments were generally covered by intergovernmental transfers of money to help shore up any shortages. Owens said the transfers were, in particular, necessary to cover shortfalls in the 911 fund, the jail fund and the ambulance fund. She noted that increasing use of cell phones, and decrease in the number of taxable landlines has devastated funding for 911 centers statewide. Also, changes in the state’s penal code has meant a main source of income for county jails — the housing of state prisoners — is getting harder and harder to come by.

Normally, the fiscal court’s audit is conducted by a private, independent firm. Owens said the state’s Auditor of Public Accounts decided to step in this time because of numerous complaints filed against the county by and unknown individual, or individuals, with the Auditor’s office.

“They investigated all of those, but none of them had any merit,” Owens said. “The complaints appear to have been election-related. None of those were substantiated … It’s unfortunate that the taxpayers will get a huge audit bill when none of these claims were true.”

White expressed dismay that the Auditor of Public Accounts was forced to step in because it is considerably more expensive. State auditors typically conduct more detailed and thorough audits that take longer, and cost considerably more — a bill that the county will be shouldered with paying.

“In particular this has been rewarding that it turned out the way it did because somebody out there was trying to make it a bad audit by filing complaints,” White said. “We don’t know how much it’s going to cost yet, but it’s going to be quite a bit more than usual. I’m still waiting to get the bill.”

Owens said that, normally, audits cost the county about $13,000 annually. The most expensive audit ever conducted for the county was that of the Whitley County Sheriff’s Department under former Sheriff Lawrence Hodge. The multi-year audit cost local taxpayers a total of $100,000.