State Auditor Mike Harmon recently released the audit of the 2017 financial statement of Clinton County Clerk Shelia Booher. State law requires the auditor to conduct annual audits of 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 principals 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 noncompliance with laws, regulations, contracts, and grants. The auditor must also comment on material weaknesses involving internal control over financial operations and reporting.

The audit contains the following comment:

The Clinton County Clerk’s office lacks adequate segregation of duties: This is a repeat finding and was included in the prior year report as Finding 2016-001. The county clerk’s office lacks adequate segregation of duties over the accounting and reporting functions of the clerk’s 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.

According to the county clerk, this condition is a result of a limited budget which restricts the number of employees she can hire or delegate duties to.

The lack of segregation of incompatible duties or strong oversight increases the risk that undetected errors could occur.

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 undetected errors occurring. Additionally, a proper segregation of duties protects employees in the normal course of performing their daily responsibilities.

We recommend the Clinton County Clerk separate the duties involved in receiving cash, preparing deposits, writing checks, posting to ledgers, preparing monthly bank reconciliation, 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 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, including financial statements and supplemental information on file at the County Clerk’s office and is available for public inspections during normal business hours.

Any citizen may obtain from the County Clerk a copy of the complete audit report, including financial statements and supplemental information, for their personal use.

Citizens requesting a personal copy of the audit report will be charged for duplication costs at a rate that shall not exceed twenty-five ($0.25) per page.

Copies of the financial statement prepared in accordance with the KRS 424.220 are available to the public at no cost at the business address of the officer responsible for preparation of the statement.