Aug. 28, 2013 — The annual audit of county government found 11 instances of non-compliance at the Carter County Detention Center.
More than 2,000 missing electronic cigarettes and questions about a possible conflict of interest were the most notable flags for CCDC and Jailer R. W. Boggs.
According to the auditor's report, the sale of e-cigarettes to inmates is not handled by the jail's third party canteen vendor. Auditors observed no inventory system for the e-cigarettes.
A surprise inventory of the e-cigarettes revealed 2,156 unaccounted for e-cigarettes- which translates to $17,916 in missing commissary money.
During the audit inventory, Boggs told auditors that he knew of no one locally who sold e-cigarettes.
However, during their field work, auditors were made aware that the jailer's wife had sold e-cigarettes to jails in surrounding counties—a fact which Boggs later verified.
Boggs told the auditors that the missing e-cigarettes had been found but on a second surprise inventory, 1,699 were still unaccounted for.
The auditors recommended that inventory be properly maintained and for missing inventory to be investigated. The report said the matter had been turned over to the AG's office and the Kentucky State Police.
Carter Judge-Executive Charles Wallace did not respond to the jail issues raised by the auditors.
In his response, Boggs said that defunct or damaged e-cigarettes had not been kept by the detention center.
In reference to the selling of e-cigarettes to other counties by his wife, Boggs stated that he had chosen not to purchase from her in order to maintain "strong ethical standards" at the jail.
Boggs said that the inventory policy did need to be more stringent although he believes the jail is not in any violation because the county has no inventory policy.
"There can be no violation or misrepresentation of an inventory standard in a county that does not have an approved inventory policy," Boggs stated in his response. "Therefore we will go above and beyond our county's established policy and utilize a higher standard."
Other instances of non-compliance at the jail included:
Jail expenditures for gas and supplies should not be paid by cash.
Gas and supplies, specifically for out-of-state prisoner transport, were purchased with cash instead of by check, as required by the uniform system of accounts.
Also in question were purchases made with cash for daily jail operations. The report stated that “the Jailer or his personnel were overriding the County purchasing procedure...to purchase items from County funds without any knowledge of the Judge-Executive of Fiscal Court.”
The auditor recommended utilizing fleet cards for gas purchases and for all purchases to be made after obtaining a purchase order from the County.
Wallace did not address the recommendation for fleet cards but did tell the auditor that petty cash was no longer used at the jail and that the jailer had been instructed to utilize purchase orders.
The Detention Center should pay fees collected on a regular basis.
Funds collected from inmates for booking fees, bond release fees, housing fees, telephone usage and commissary purchases are handled by a third party vendor software system and paid monthly to the county.
However, from November 2012 through February 2013, no payments were made. Once this was discovered and discussed with management, a payment was made by the detention center to the county for $25,161 for telephone usage fees and $15,437 for the other fees.
The auditor recommended that the fees be paid to the county on a monthly basis. Wallace said that Boggs was already making these payments monthly.
The Fiscal Court should approve all contracts.
The jailer entered into a contract with a third party vendor to operate and maintain inmate telephone equipment and systems in January 2011.
The auditor reported that the jailer does not have the authority to enter into any contracts, and recommended Fiscal Court approve all contracts.
Wallace said the issue had already been addressed and corrected.
The Jailer should pay all sales taxes to the Kentucky Revenue Cabinet as required.
The jail did not collect sales tax on the sales of Subway sandwiches. The jail has contracted with an outside service to handle the jail commissary. The service pays the sales tax to the Kentucky Department of Revenue as required. However, the service does not pay the sales taxes collected on the sale of Subway sandwiches.
Since the Detention Center was in non-compliance with KRS 139.550, this could result in assessment of penalties and interest for failure to make payments in a timely manner.
To assure compliance, the auditor recommended that the jailer ensure sales tax collected on the sales of all fast food is paid to the Department of Revenue as required.
Boggs stated that the error had been corrected.
The Jailer should deposit all funds daily.
During the audit, it was discovered that inmate funds collected at the jail were not being deposited on a daily basis. The auditor recommended that funds be deposited once they collectively exceeded $500.
Boggs said staffing limitations were the cause of the issue and he assured the auditors that the jail would do better in the future.
The Jail did not issue receipts in accordance with KRS 64.840.
The detention center did not prepare pre-numbered receipts for all funds collected at the time of collections.
The auditor recommended that receipts be prepared for all monies received either in the office or by mail.
Boggs requested a clarification of the KRS since most monies are received electronically.
The jail should review and pay medical bills in a timely manner.
The audit uncovered more than $20,000 in unpaid medical bills from July 2009 to December 2012. Some bills were not the county's liability, however the audit recommended that all medical bills be reviewed by the jailer on a monthly basis and all invoices be sent to the judge- executive for approval and payment.
Boggs said in his response that the jail had requested clarification on medical releases from the AG's office.
The jail lacks adequate segregation of duties.
Segregation of duties over accounting functions of cash collection, cash disbursements, and reconciliation of bank records to source documents or implementation of compensating controls when limited by the number of staff is essential.
The auditor recommended that the jailer separate duties and, if that is not feasible due to staffing limitations, then strong oversight should be implemented.
The jailer should improve controls over inmate refunds.
Checks are currently issued to inmates in person upon their release. However, KRS 441.137 states that checks should be mailed to the inmate’s last known address. The auditor recommended that the jailer follow guidance set forth in KRS.
Boggs, in his response, cited House Bill 463, stating “This is a new rule and we have implemented what is necessary for compliance.”
The jail should improve controls over inventory.
The jail maintains inventory (e- cigarettes, snack packs and drug testing kits) to sell to inmates. Although e-cigarettes are locked up, no formal inventory procedures are in place. The auditor recommends that an inventory log be maintained and reconciled on a monthly basis.
In his response, Boggs stated that 501 KAR 3.030 says the jailer should use the county's inventory policy – which, according to Boggs, does not exist.