State Auditor Mike Harmon has released the audit for the 2015 financial statement of Clinton County Clerk Shelia Booher. State law requires the auditor to conduct annual audits of the county clerks and sheriffs.

Auditing standards require the auditor’s letter to communicate whether the financial statement presents fairly the receipts, disbursements, and excess fees of the Clinton County Clerk in accordance with accounting principles generally accepted in the United States of America. The clerk’s financial statement 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 for 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 is responsible for receiving cash, preparing daily deposits, preparing and signing checks, posting to receipt and disbursement ledgers, preparing monthly bank reconciliations, and also comparing the weekly, monthly, and quarterly reports to the ledgers.

This condition is a result of a limited budget, which restricts the number of employees the county clerk can hire or delegate duties to. A lack of segregation of incompatible duties increases the risk of undetected errors.

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 or not being detected. Additionally, a proper segregation of duties protects employees in the normal course of performing their daily responsibilities.

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

County Clerk’s response: No response.

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.

(The Auditor of Public Accounts ensures that public resources are protected, accurately valued, properly accounted for, and effectively employed to raise the quality of life of Kentucky. Call 1-800-KY-ALERT or visit our website to report suspected waste and abuse.)