State Auditor Crit Luallen has released the audit of the 2010 financial statement of the Clinton County Sheriff, Ricky Riddle. State law requires the 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 presents fairly the revenues, expenditures, and excess fees of the Clinton County Sheriff in conformity with the regulatory basis of accounting.

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 comments:

The Sheriff should account for all receipts in the appropriate accounts. The Sheriff engaged in the practice of transferring funds between multiple accounts in order to cover operating expenses of his office. Our examination of receipts and disbursements indicated the following:

a) In January 2010, $1,944 was expended from the Drug Eradication account to cover Deputies’ payroll. The 2010 fee account has not reimbursed the Drug Eradication account to correct these errors.

b) On January 31, 2011, $2,115 was expended from the 2010 fee account to cover payroll withholding expenses. The 2011 fee account has not reimbursed the 2010 fee account to correct these errors.

c) During calendar year 2010, office supply purchases totaling $874 were paid from the Drug Abuse Resistance Education (DARE) account in error. However, in December 2010, the 2010 fee account reimbursed the DARE account to correct these errors.

KRS 134.160(5) states, “Other than for investments and expenditures permitted by this chapter, the Sheriff shall not apply for or use any money received by him for any purpose other than that for which the money was paid or collected.”

The audit recommends the Sheriff refrain from making loans to various accounts, and that all receipts are deposited to the appropriate accounts. In addition, the audit recommends that all outstanding receivables noted herein are transferred to the appropriate accounts.

The Clinton County Sheriff, Ricky Riddle, responded, “We will take care of it.”

The Sheriff should deposit receipts intact on a daily basis. During the course of the audit, auditor noted that deposits were not made in a timely manner. The review indicated a total of 83 deposits were made into the 2010 fee account. The auditor found that 50 of these deposits did not clear the bank within three (3) business days. In addition, the auditor noted that three (3) of the deposits took over twenty business days to clear the bank. The auditor also noted penalties totaling $60 were charged due to instances of the account being overdrawn.

The Sheriff lacks control over the deposit process and does not provide adequate oversight in this area.

The Department for Local Government (DLG) was given the authority by KRS 68.210 to prescribe a uniform system of accounts. The minimum requirements for handling public funds as stated in the Instructional Guide for County Budget Preparation and State Local Finance Office Policy Manual require that deposits be made daily. Additionally, the practice of making daily deposits reduces the risk of misappropriation of cash, which is the asset most subject to possible theft. Also, when deposits are not made timely, the risk that the bank account can be overdrawn is increased.

This noncompliance has been addressed in prior year audits. However, the Sheriff has not corrected this issue.

The audit recommends the Sheriff immediately implement controls over the deposit process to assure deposits are made daily to comply with KRS 68.210.

The Clinton County Sheriff, Ricky Riddle, responded, “We’re going to do better on the deposits.”

The Sheriff should be earning interest on his official accounts. The Sheriff does not earn interest on all of his official accounts. Funds deposited into the Sheriff’s Drug Eradication, Drug Abuse Resistance Education (DARE), and Fee accounts are not earning interest income.

KRS 66.480(4) states, “county officials, may, and at the redirection of the fiscal court shall, invest and reinvest money subject to their control.” Additionally, depositing receipts in an interest bearing account would provide investment income beneficial to the office.

This noncompliance has been addressed in prior year audits. However, the Sheriff had not corrected this issue.

The audit recommends the Sheriff deposit all applicable receipts of his office into interest bearing accounts.

The Sheriff’s office lacks adequate segregation of duties. This occurs when only one person has control over various elements of a single account, e.g., deposits and payments. The report recognizes that due to the diversity of operations, small size, and budget restrictions, the Sheriff has limited options for establishing a segregation of duties. However, the audit provides the Sheriff with specific recommendations for improvement of procedures.

The Clinton County Sheriff, Ricky Riddle, responded, “We’re trying to do better.”

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.

The report, in its entirety, can be accessed at the following Internet site: www.auditor.ky.gov.

Luallen releases audit of
Clinton County Sheriff’s Office