Press Release from Ed Hatchett,
Kentucky Auditor of Public Accounts

Subject: Hatchett says better controls will restore accountability at the Kentucky Department of Education
Release Date: July 31, 2000
Audit online at: http://www.auditor.ky.gov/Public/Audit_Reports/Archive/IndependentAuditors'Report7-31-00.pdf

Commonwealth of Kentucky
Auditor of Public Accounts
144 Capitol Annex
Frankfort, KY 40601

Contact:
Harold McKinney
Legal Counsel
Phone 502-573-0050
FAX 502-573-0067
APA.PressReleases@auditor.ky.gov
(Frankfort - July 31, 2000) State Auditor Ed Hatchett said today that the Kentucky Department of Education’s accountability to taxpayers can be restored by implementing additional financial controls and policies. Hatchett said, "We are all aware of the embezzlement KDE has confronted over the last several months. The recommendations made in this report and in our two special examinations can help KDE regain the confidence of Kentucky’s taxpaying citizens."

Hatchett’s report found that improper delegations of authority among top-level KDE administrators contributed to an environment in which embezzlement was possible. In addition, loose or non-existent policies toward co-operatives resulted in the payment of excessive administrative fees and other questionable charges. The report recommends that KDE

  • Eliminate improper delegations of authority
  • Establish procedures for co-operatives to follow before they spend funds for KDE programs
  • Require division directors to monitor the financial activities in their programs
  • Tighten controls over the payment of administrative fees to co-operatives
  • Execute uniform master agreements with co-operatives
  • Restrictively endorse all checks when received
  • Employ consistent receipt procedures and effective segregation of duties

The report also notes that KDE agreed to pay hundreds of thousands of dollars in local occupational taxes not withheld from KDE’s Ohio Valley Educational Co-operative employees. It reiterates KDE’s responsibility to lapse any unobligated funds remaining at year-end, and once again calls for KDE’s appointment of an internal auditor.

 

Edward B. Hatchett Jr.
Auditor of Public Accounts
144 Capitol Annex
Frankfort, KY 40601
WEB: www.auditor.ky.gov/