The Times-Tribune
CORBIN —
By Carl Keith Greene / Staff Writer
Knox County’s audit of financial records from July 1, 2008 to June 30, 2009 “fairly present the county’s assets, liabilities and equity arising from cash transactions and revenues received and expenditures paid.”
The audit reports that the county’s total assets at the end of June 2009, totalled $18,960,441.
Total liabilities for that year totalled $19,207,741, for net assets of minus $247,300.
The audit lists five “significant deficiencies” in internal controls and seven incidents of noncompliance.
First was mentioned that the county should maintain proper records for the Public Properties Corporation Fund and for the hospital general obligation refunding bond fund.
Judge-Executive J.M. Hall responded, “We agree, this issue is in process of being corrected.”
The second deficiency noted was that after selecting 69 invoices, totalling $1.9 million, the auditors found that three of them, totalling $107,141 had not been paid within 30 days.
The auditors also traced 20 invoices to encumbrances reported on the fourth quarter statements. Eight invoices totalling $158,548 were improperly excluded from the financial statements.
Hall responded, “Please see attached for item one. Item two has been corrected.”
The auditor replied, “Supporting documentation provided did not support the invoices being paid timely.”
Next, the auditors commented on $6,053 in credit card expenditures that could not be appropriately validated and were not properly documented.
They suggested maintaining paper trails of the use of the credit cards along with the signature of the employee to “substantiate and provide adequate documentation.”
Hall responded, “Please see attachment.” The auditors replied, “Supporting documentation provided only detailed what the purchases were for and did not include the actual invoice.”
Auditors also stated that the county should maintain accurate capital asset schedules to comply with Government Accounting Standards Board statement 34 (GASB34).
They said the county did not have a completed capital asset schedule for the 2008-2009 fiscal year.
Hall responded, “This issue is in the process of being corrected.”
Next the auditors reported that at the time of the audit the jail had no policies and procedures in place for segregated duties to safeguard assets.
It suggested separate people handle incoming and outgoing money, and that the jailer should submit an annual report to the county treasurer on the jail’s canteen account.
Jailer Larry Hammons replied, “We are working with ... our purchasing officer to clear this matter up.”
Noncompliance issues were listed by the auditors.
They reported, “Vacation leave should not be accrued for employees.”
Hall responded, “No vacation time was actually accrued, it was an error in record keeping. This has been corrected.”
Auditors noted that the county’s health insurance does not pay the same insurance premiums for “standard” employees that it does for “elected officials.”
They recommended that the county provide the same level of benefits to all county employees.
Hall responded, “Per our county attorney, elected officials are not standard employees. Therefore, elected officials are not subject to the same rules in this case.”
The auditors replied, noting an attorney general’s opinion that “finds no reasonable basis in the law for elected officials to offer a different level of health insurance coverage to the non-elected, ‘standard’ employees than that available to the elected officials themselves.”
Next the auditors note that the “judge-executive does not maintain an appropriate ledger that is separate from the treasurer, and does not reconcile it monthly.”
Hall responded, “The judge-executive’s and treasurer’s computers are networked together and use the same software.”
The auditors also noted that the fiscal court minutes should be complete, adequately maintained and filed in the proper location.
Hall responded, “We agree and this issue is in the process of being corrected.
Auditors noted that the county should incorporate any future Knox County hospital default obligations in the county’s budget.
Hall replied, “This is bonded by our general obligation bonds. Therefore, not budgeted for.”
Recommendations from the auditors suggested that the court bond the occupational tax administrator and the finance officer.
Hall responded, “We agree and the issue has been corrected.”
The county’s failure to monitor federal grant funds was brought up and it was suggested the county implement policies and procedures to adequately monitor the grants.
Hall responded, “Attached are correspondences with DFC Grants Management Specialists.” He continues, “Local DFC Program Director and Knox County UNITE Coalition secretary are working collaborative on a monthly basis with the Knox County treasurer to ensure that actual budget expenditures are allowed within the fiscal year budget.”
