Luallen Releases Audit of See the audit report for Full Details |
Crit Luallen |
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(Frankfort - August 20, 2008)
State Auditor Crit Luallen has released the audit of the financial statements of the Floyd County Fiscal Court for the fiscal year ended June 30, 2007. State law requires annual audits of county fiscal courts.
The audit found that the county’s financial statements, in all material respects, fairly present the county’s assets, liabilities, and equity arising from cash transactions and revenues received and expenditures paid 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 Fiscal Court should maintain proper records for the Public Properties Corporation Fund. The Fiscal Court did not maintain proper records for the Public Properties Corporation – Debt Service Fund (PPC). The County made all bank statements available, however, they did not maintain a receipt and disbursements ledgers or prepare a financial statement. The audit recommends the County maintain a receipts and disbursements and prepare a financial statement for the Public Properties Corporation Fund. The Floyd County Judge/Executive, Robert Marshall, responded, “While the county did provide a financial statement in the quarterly and annual reports; however the County will maintain a receipt and disbursement ledger in the future and will make the necessary efforts to follow through on these recommendations.” The Fiscal Court should ensure the quarterly report – liabilities section is accurate. The outstanding principal balance on the liabilities section of the 4th quarterly report did not agree to the confirmed debt balance at June 30, 2007. The audit recommends the County contact their banking institutions and determine the accurate outstanding principal balance as of June 30, 2007 to ensure the accuracy of their 4th quarterly report. The Floyd County Judge/Executive, Robert Marshall, responded, “The Floyd County Treasurer stated that County’s liability section was originated from statements given to the County by our creditors. However the County will request that our banking institutions make the necessary corrections to prevent this from happening in the future.” The Fiscal Court should require bids for all purchases over $20,000. The Fiscal Court leased two Chevrolet Tahoes for the use of the County Judge/Executive and 911 Coordinator. The payments are $824 for each lease for 39 months totaling $32,526 for each lease. KRS 424.260 states when the County makes a contract, lease, or other agreement involving an expenditure of more than $20,000, they must advertise for bids. The audit recommends the County not enter into lease agreements when more than $20,000 of expenditures are required without advertising for bids. . The Floyd County Judge/Executive, Robert Marshall, responded, “With regards to the County’s use of the 2007 Tahoe the County has entered into a rental agreement. The County will make the necessary corrections to prevent this from happening in the future.” The Fiscal Court should maintain an accurate and complete schedule of capital assets. The Fiscal Court did not include all new additions to the capital assets list. They did not include all new land, building improvements and vehicles purchased during fiscal year 2007 totaling $926,549. Furthermore, the County did not have capital road expenditures separated from operating expenditures, or separated between paving projects and bridge replacement projects. The audit recommends the County maintain an accurate capital assets listing throughout the year and maintain a log of capital road expenditures that includes a listing of roads paved, bridges replaced as well as any other capital projects. . The Floyd County Judge/Executive, Robert Marshall, responded, “The County agrees with this statement and shall have the Road Department and Finance Officer follow this recommendation to prevent this from occurring in the future. The Finance Officer shall periodically review the capital asset list to make sure that this recommendation is being followed as stated.” The Fiscal Court should pursue a buyer to purchase East Kentucky Utilities, Inc. In October 2004, the Fiscal Court began the process of assuming control of East Kentucky Utilities, Inc. (EKU), a gas company, in order for approximately 1,000 residents to maintain utilities. KRS 67.083 (3) states that: “The Fiscal Court shall have the power to carry out governmental functions necessary for the operation of the county. Except as otherwise provided by statute or the Kentucky Constitution, the Fiscal Court of any county may enact ordinances, issue regulations, levy taxes, issue bonds, appropriate funds, and employ personnel in performance of the following functions…” KRS 67.083(3)(r) goes on to state: “Provision of water and sewage and garbage disposal service but not gas or electricity. The audit recommends the Fiscal Court comply with KRS 67.083 and pursue a buyer to purchase EKU. The Floyd County Judge/Executive, Robert Marshall, responded, “The County agrees with this statement. The Board of Directors of East Kentucky Utilities, which does not count as their members any current members of the Floyd County Fiscal Court, voted unanimously to request that the Fiscal Court advertise the sale of this company for bids. The Fiscal Court on March 27, 2008 voted to advertise the sale of the East Kentucky Utilities to the highest and/or best bidder. The County will make the necessary efforts to follow through on these recommendations.” |
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