Aug. 28, 2013 — The annual audit of county government’s finances was released Friday by State Auditor Adam Edelen and it highlights several areas of concern with financial practices.
The 16-page cover letter identifies issues of non-compliance with state law, both in the handling of funds and lack of required notice to the Fiscal Court by the judge-executive regarding certain transactions.
According to the auditors, Carter Fiscal Court is not paying all invoices within a 30-day time frame as required under Kentucky law.
The report documents 10 invoices totaling $110,968 that were not been paid within the required time limit with no documentation that the delay was the result of written disapproval of improper invoicing.
Judge-Executive Charles Wallace attributed the late payments to invoices not being submitted in a timely manner.
“The invoices that are turned in late have to wait for the next month’s meeting to be approved which sometimes results in being over 30 days. We are working on getting this resolved,” Wallace said in the audit document.
A June 6, 2012, article in the Journal-Times, however, notes at least once instance of the judge-executive intentionally withholding a claim from the Fiscal Court.
A final bill from Morgan-Franklin, LLC was submitted to the judge-executive's office on Feb. 1, 2012, and still had not been presented to the Fiscal Court as of the June article because of questions Wallace had concerning the audit's findings.
The new audit report also documents $6,319 of consulting bills that were approved by the Fiscal Court but Court members were not aware of the hiring of this consultant, nor was it noted in the order book that they approved the hiring.
The Fiscal Court should approve the hiring of outside consultants and all other agreements.
“An individual was first hired as an assistant to the judge’s office staff to review costs at the jail and then became an employee as the assistant to the judge as stated in the minutes,” responded Wallace.
The audit report also noted issues with the county’s handling of Community Development Block Grant (CDBG) funds.
Based on cash management requirements, the county must spend grant funds within five days of receiving them.
A draw-down of $300,000 was received on Oct.13, 2011, but the funds were not paid out until Jan. 18, 2012, and Feb. 16, 2012.
“Without improving cash management controls, the county could jeopardize future federal funding,” Edelen said in the report.
“We had not received this invoice in a timely manner,” said Wallace in response to the auditor's comments.
The report also noted that the county did not provide an accurate financial report to the State Local Finance Officer, did not perform an annual inventory, did not report encumbrances on its financial statements and paid eight invoices without the approval of the Fiscal Court.
The state auditor annually reviews the financial statements of the Fiscal Court, the county clerk and the sheriff.
Joe Lewis can be reached at email@example.com or by telephone at 286-4201.