Luallen Releases Audit of See the audit report for Full Details |
Crit Luallen |
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(Frankfort - August 25, 2008)
State Auditor Crit Luallen today released the audit of the 2007 financial statement of the Jackson County Sheriff, Tim Fee. 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 presents fairly the revenues, expenditures, and excess fees of the Jackson County Sheriff 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 Sheriff should obtain a written service agreement for contract labor and issue IRS Form 1099 Misc. accordingly. Auditors noted the Sheriff retained an independent contractor without having a written agreement describing the scope of the services to be performed. Also, the individual was not issued a tax form 1099 Misc. for the $4,628 he was paid during 2007. In order for the contractor to be paid, an invoice detailing the service provided on a monthly basis should be required including supporting documentation for the time, expenses and mileage reimbursement. The audit recommends the Sheriff contact the County Attorney for guidance on preparing a service agreement detailing the scope of services to be performed and also issue a tax form 1099 Misc. for 2007. The Jackson County Sheriff, Tim Fee, responded, “Already spoken to Constable and will contact County Attorney and prepare contract and prepare 1099.” The Sheriff’s office lacks adequate segregation of duties. The Sheriff’s office lacks adequate of segregation of duties because the functions of receiving, recording, depositing, disbursing, and reconciling cash were not delegated to separate individuals. One employee was responsible for all depositing, recording, and reconciling functions. Good internal controls dictate that the same employee should not handle, record, and reconcile receipts and disbursements due to the risk that misstatements may occur and go undetected. Compensating controls were not documented to a level sufficient to give auditors assurance that the risk of misstatement due to inadequate segregation of duties was mitigated. The audit recommends the Sheriff’s office establish adequate segregation of duties or establish and document compensating controls implemented to offset this weakness. Examples of compensating controls include:
The Jackson County Sheriff, Tim Fee, responded, “Sheriff will try to check on accounting whenever possible.” 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. |
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