Luallen Releases Audit of
Martin County Sheriff’s Office

Crit Luallen
Auditor of Public Accounts
105 Sea Hero Road, Suite 2
Frankfort, KY 40601

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The audit has been referred to the Kentucky Attorney General’s Office for further review.

The deficit is a result of disallowed expenditures from the sheriff for the following items: $1,047 in anti-drug education materials not purchased with DARE funds; $474 in bank late fees, finance charges and penalties; $604 in children’s badges; $295 for tee shirts; $165 for advertising in the local high school yearbook and $130 for conference fees for spouses.

At the same time, auditors found $411 in expenditures with no supporting documentation to determine if the payments made were reasonable and necessary expenditures of the office.

As part of its annual audit, the Kentucky State Auditor’s Office must comment on any non-compliance by a sheriff in regards to laws, regulations, contracts and grants, along with material weaknesses involving the financial operations and reporting of each office.

One of the areas of concern found by auditors in Martin County dealt with the sheriff’s lack of oversight with $31,513 of fuel credit card purchases, leaving auditors uncertain if all of the fuel purchased was appropriately used.

Auditors found that the sheriff did not review the credit card statements, maintain vendor receipts or reconcile the amounts on the monthly billing statements of his office’s 10 fuel credit cards. Additionally, deputies shared fuel card “PIN” numbers, and the office bookkeeper, who is the sheriff’s daughter, used a fuel card to purchase fuel for her own personal vehicle, as well as other vehicles belonging to the sheriff’s office, according to the audit.

Auditors cautioned the sheriff to ensure the fuel credit cards are used to purchase fuel for official vehicles only and that any time official travel is done in a personal vehicle a request for mileage reimbursement should be completed.

Other findings from the audit include:

• The sheriff did not maintain complete and accurate financial reports and did not prepare an accurate and complete financial statement. The sheriff’s office did not properly maintain receipts and disbursements ledgers or were they reconciled monthly to the bank records. Receipts were misstated by $27,285 and disbursements were misstated by $6,245 on the fourth quarter report submitted to the Governor’s Office for Local Development.

• The sheriff did not maintain adequate timesheets for all employees. The sheriff’s office employees did not properly maintain timesheets. The timesheets were not maintained daily and the reports were not maintained in an organized manner. The sheriff provided timesheets; however, employees did not sign all timesheets and the sheriff did not approve all timesheets.

• The sheriff did not reimburse his 2005 official bank account $381 for disallowed expenditures for credit card charges. In calendar year 2005, $381 of credit card charges was disallowed for the lack of supporting documentation. The sheriff was directed to deposit personal funds to reimburse the 2005 fee account for these disallowed expenditures. As of Jan. 24, 2008, the sheriff had not reimbursed the 2005 fee account for these disallowed expenditures.

• The sheriff did not request salary reimbursements from Unlawful Narcotics Investigations Treatment and Education (UNITE) Grant in a timely manner. The sheriff did not request reimbursement for payroll for the Unlawful Narcotics Investigations Treatment and Education (UNITE) officer on a timely basis.

• Sheriff’s office lacks adequate segregation of duties. The sheriff’s office has a lack of proper segregation of duties due to the fact that the bookkeeper posts all items to the receipts and disbursements ledger, prepares and signs all checks, prepares monthly bank reconciliations and the financial statements. Good internal controls dictate that the same employee should not handle, record, and process financial information.

Crit Luallen
Auditor of Public Accounts
105 Sea Hero Road, Suite 2
Frankfort, KY 40601
WEB: www.auditor.ky.gov/