Luallen Releases Audit of Former See the audit report for Full Details |
Crit Luallen |
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(Frankfort - January 23, 2008)
State Auditor Crit Luallen today released the audit of the 2006 financial statement of former Pulaski County Clerk, Trudy Denham. State law requires the Auditor to conduct annual audits of county clerks and sheriffs.
The audit found that the former Clerk’s financial statement presents fairly the revenues, expenditures, and excess fees of the former Pulaski County Clerk 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 former County Clerk's office lacked 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 Clerk has limited options for establishing a segregation of duties. However, the audit provides the Clerk’s office with specific recommendations for improvement of procedures. The former County Clerk should have required the depository institution to pledge or provide sufficient collateral and entered into a written agreement to protect deposits. On February 16, 2006 $29,866, and on December 31, 2006 $100,000 of the former County Clerk’s deposits of public funds were uninsured and unsecured. According to KRS 66.480(1)(d) and KRS 41.240(4), financial institutions maintaining deposits of public funds are required to pledge securities or provide surety bonds as collateral to secure these deposits if the amounts on deposit exceed the $100,000 amount of insurance coverage provided by the Federal Deposit Insurance Corporation (FDIC). The former County Clerk should have required the depository institution to pledge or provide collateral in an amount sufficient to secure deposits of public funds at all times. The former County Clerk should have entered into a written agreement with the depository institutions to secure the former County Clerk’s interest in the collateral pledged or provided by the depository institution. According to federal law, 12 U.S.C.A. § 1823(e), this agreement, in order to be recognized as valid by the FDIC, should be (a) in writing, (b) approved by the board of directors of the depository institution or its loan committee, which approval must be reflected in the minutes of the board or committee, and (c) an official record of the depository institution. 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. |
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