State Auditor Adam Edelen has released the audit of the 2014 financial statement of Clinton County Clerk Shelia Booher. State law requires the auditor to conduct annual audits of county clerks and sheriffs.

Recent changes in auditing standards require the auditor’s letter to communicate whether the financial statement presents fairly the revenues, expenditures and excess fees of the Clinton County Clerk in accordance with generally accepted accounting principles in the United States. The report found that the financial statement of the Clerk did not follow this format; however, the Clerk’s financial statement is fairly presented in conformity with the regulatory basis of accounting, which is an acceptable reporting methodology. This reporting methodology is followed in all 120 clerk audits in Kentucky.

As part of the audit process, the auditor must comment on non-compliance with laws, regulations, contracts and grants. The auditor must also comment on material weaknesses involving the internal control over financial operations and reporting.

The audit contains the following comment:

The County Clerk’s office lacks adequate segregation of duties. The County Clerk’s office lacks adequate segregation of duties over the accounting and reporting functions of the office. The County Clerk’s bookkeeper collects cash receipts and is responsible for preparation of the ledgers and financial reports. The County Clerk is responsible for receiving cash, preparing daily deposits, preparing and signing checks, and also comparing the weekly, monthly and quarterly reports to the ledgers.

A lack of segregation of incompatible duties or strong oversight increases the risk that errors could occur and not be detected.

This condition is a result of a limited budget, which restricts the number of employees the County Clerk could hire or delegate duties to.

A proper segregation of duties over the accounting and reporting functions such as preparation of the quarterly reports or implementing compensating controls, when necessary because of a limited number of staff, is essential for providing protection from errors occurring and not being detected. Additionally, a proper segregation of duties protects employees in the normal course of performing their daily responsibilities.

The County Clerk could separate the duties involved in receiving cash, preparing deposits, writing checks, posting to ledgers, preparing monthly bank reconciliations, and comparing financial reports to ledgers. If due to a limited budget this is not feasible, cross-checking procedures could be implemented and documented by the individual performing the procedure.

County Clerk’s response: None.

The county clerk’s responsibilities include collecting certain taxes, issuing licenses, maintaining county records and providing other services. The clerk’s office is funded through statutory fees collected in conjunction with these duties.

The audit report can be found on the auditor’s website.