State Auditor Crit Luallen has released the audit of the Sheriff’s Settlement–2010 Taxes for Clinton County Sheriff, Ricky Riddle, for the period April 16, 2010 through April 15, 2011. 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 fairly represents the taxes charged, credited and paid, for the period of April 16, 2010 through April 15, 2011, in conformity with the modified cash 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 deposit funds intact on a daily basis. During the course of the audit, auditors noted that deposits were not made in a timely manner. The review indicated a total of 100 deposits were made into the 2010 tax account. Auditors found that 48 of these deposits did not clear the bank within three (3) business days. In addition, auditors noted that two (2) of the deposits took over 20 business days to clear the bank. The Sheriff lacks control over the deposit process and does not provide adequate oversight in this area.

The Department of 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 Officer 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.

This finding has been addressed in prior years audits. However, the Sheriff has ignored the recommendation to remedy the 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, “ok.”

The Sheriff should invest moneys in an interest bearing account. The Sheriff deposited funds into a noninterest-bearing account. KRS 66.480 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.

The audit recommends the Sheriff deposit all tax collections into interest bearing accounts.

The Clinton County Sheriff, Ricky Riddle, responded, “We did but the bank didn’t do it.”

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, “ok.”

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.

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