Kentucky Auditor Mike Harmon released the audit for the Madison County Sheriff's Tax Settlement on Thursday and the audit showed one area of weakness.
As part of the audit process, Harmon must comment on noncompliance with laws, regulations, contracts and grants as well as comment on material weakness involving internal control over financial operations.
For the county's sheriff department's Tax Settlement, for the period of April 2017 to April 2018.audit, it was stated that the "sheriff does not have adequate segregation of duties for receipts, disbursements and reconciliations."
Segregation of duties over different accounting functions, like opening mail, preparing deposits and recording receipts etc., is crucial to providing protection from asset misappropriation and inaccurate financial reporting. Additionally, the report says proper segregation of duties protects employees in the normal course of performing their daily responsibilities.
The release went on to say that the sheriff's office "lacks segregation of duties over receipts, disbursements and reconciliations." It adds that the bookkeeper prepares and signs checks and posts the disbursements to ledgers.
Following the exit of their last bookkeeper, the new bookkeeper would prepare the daily checkout sheets and deposits, post the receipts to the ledger and take deposits to the bank. The release states the bookkeeper performed bank reconciliations without oversight.
Inadequate segregation of duties can result in undetected misappropriation of assets and inaccurate financial reporting to external agencies such as the Department of Local Government, the audit shares.
In the audit, Mike Coyle, the county's sheriff, stated this condition is because of a "limited budget," therefore, restricting the number of employees the department can hire, or delegate duties.
Harmon's office recommended to the sheriff he separate job responsibilities and that if this is not feasible because of the lack of staff, the sheriff implement other controls in attempts to "mitigate any weakness."
In the audit report, it states that Sheriff Coyle responded by saying receipts, disbursements and reconciliations have been distributed between six employees to check.
Sheriff's office responsibilities include collection property taxes, providing law enforcement and performing services for the county fiscal court and courts of justice. The office is funded through statutory commissions and fees collected in conjunction with these duties.