Former sheriff gets relatively good audit report

Former interim Whitley County Sheriff Danny Moses received a relatively good financial audit of his 2022 financial statement for the sheriff’s fee account, according to Kentucky Auditor Mike Harmon’s Office.

State law requires the auditor to annually audit the accounts of each county sheriff. In compliance with this law, the auditor issues two sheriff’s reports each year: one reporting on the audit of the sheriff’s tax account, and the other reporting on the audit of the fee account used to operate the office.

As part of the audit process, the auditor must comment on noncompliance with laws, regulations, contracts, and grants. The auditor must also comment on material weaknesses involving the internal control over financial operations and reporting

The audit contained only one finding, which was that the former sheriff did not have adequate segregation of duties, according to a release from Harmon’s office.

This is a one of the most common audit finding for small governmental offices with a limited number of staff.

This is a repeat finding and was included in the prior year audit report, according to the release.

The former Whitley County Sheriff’s bookkeeper collected payments from customers, posted transactions to the receipts ledger, wrote checks, posted transactions to the disbursement’s ledger, and prepared monthly and quarterly reports.

A lack of oversight could result in undetected misappropriation of assets and inaccurate financial reporting to external agencies, such as the Department for Local Government (DLG). According to the former sheriff, the office had a limited number of employees that prevented an adequate segregation of duties over most accounting functions of the office, the auditor’s release stated.

The segregation of duties over various accounting functions, such as opening mail, preparing deposits, recording receipts and disbursements, and preparing monthly reports, or the implementation of compensating controls is essential for providing protection from asset misappropriation and inaccurate financial reporting. Additionally, proper segregation of duties protects employees in the normal course of performing their daily responsibilities.

“We recommend the Whitley County Sheriff’s Office separate the duties involved in receiving cash, preparing deposits, writing checks, posting to ledgers, preparing monthly bank reconciliations, and comparing financial reports to ledgers to separate individuals,” the release noted.

“If this is not feasible due to a limited budget, cross checking procedures should be implemented and documented by the individual performing the procedures.”

Moses’ office did not provide a response to the audit finding.

The sheriff’s responsibilities include collecting property taxes, providing law enforcement and performing services for the county fiscal court and courts of justice. The sheriff’s office is funded through statutory commissions and fees collected in conjunction with these duties.

The audit report can be found on the auditor’s website at https://auditor.ky.gov/Auditreports.