State Auditor gives Whitley Sheriff's office near perfect audit
For several years, state auditors found evidence of alleged misdeeds, improper spending, bad bookkeeping, etc. during state audits on the books of former Whitley County Sheriff Lawrence Hodge.
Two state audits released Thursday on the books of current Whitley County Sheriff Colan Harrell painted vastly different pictures though.
An audit of the sheriff's 2010 tax settlement found no instances of non-compliance.
An audit of the sheriff's 2011 financial statement generated only one comment from auditors, which was that the office lacked "adequate segregation of duties," which is a common audit finding for government offices with small staffs.
State law requires the state 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.
"The audit found that the sheriff's financial statement fairly presents the taxes charged, credited and paid, for the period Jan. 1, 2011 through April 15, 2011, in conformity with the modified cash basis of accounting," State Auditor Adam Edelen wrote in a press release about the tax account audit.
"The auditor noted no instances of noncompliance. The auditor also noted no matters involving internal control over financial reporting and its operations that were considered to be material weakness."
Edelen found in the other audit that the financial statement presents fairly the revenues, expenditures and excess fees of the Whitley County Sheriff in conformity with the regulatory basis of accounting.
"During our review of internal controls, we noted that the sheriff has a lack of segregation of duties. The sheriff's bookkeeper receives revenues as well as prepares deposits, record disbursements, reconciles reports, and post adjustments to the ledger," Edelen wrote in another press release.
"Due to an entities small size and budget restrictions, an official may have limited options for establishing adequate segregation. In such cases, compensating controls should be implemented."
Compensating controls limit the severity of an internal control deficiency and prevent it from rising to the level of a significant deficiency or material weakness.
"To adequately protect against misappropriations of assets and/or inaccurate financial reporting, the sheriff should separate the duties involving the posting of transactions to the ledgers and preparing financial reports," auditors noted in the release.
"If, due to a limited number of staff, that is not feasible, strong oversight over these areas should occur and involve an employee not currently performing any of those functions. Ideally, the sheriff should provide this oversight. If the sheriff does implement additional compensating controls, these should be noted on appropriate source documentation."
Harrell did not provide an official response to the finding in the audit, the release notes.
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.
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