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SHEPHERDSVILLE - For another year, an audit of the Bullitt County government financial records has included a long list of non-compliances.
State auditor Crit Luallen’s release on Monday of the 2009-10 fiscal year for Bullitt County included many of the same criticisms listed the year before.
Bullitt County Judge/Executive Melanie Roberts and county treasurer Kenann Bradley were both given opportunities to present any course of action to correct the areas of weakness.
Luallen’s audit listed the following issues:
*Lack of a written agreement with PBI Bank to protect its deposits
While the audit stated that there was sufficient collateral to cover the county’s bank deposits of $3.67 million on June 30, 2010, there is also a KRS requirement to have a written agreement between the county and the bank.
Roberts stated that her office would request such an agreement.
*Bank reconciliations are not being accurately prepared
For several years, the audit stated that there was a variance between the bank balance and the county’s records. The reason for the variance was not investigated or resolved.
Due to the variance, the auditor had to make an adjustment of $52,067.75 to the cash balance to make the two agree.
The audit recommendation was for the treasurer to investigate and resolve all variances in a timely manner.
Bradley said that this was a software issue and she had already contacted the software management company to find a solution.
*Expenditure ledgers are not reconciled
In looking at a check register from the treasurer, the audit reported that there was some disagreement with the invoices tested.
“These inconsistencies in the information are a result of the lack of communication and reconciliation between the Judge’s office and the Treasurer’s office,” the report revealed.
It was recommended that the treasurer review all invoices and ensure expenditures are properly coded. Also, the auditor wrote that communication should be improved so better reconciliation of the expenditure ledgers is possible.
Both Bradley and Roberts responded that they would provide information to each other’s office to double-check the invoices and payments.
*Lack of segregation of duties in the payroll system
Without more checks and balances, Luallen stated that the risk significantly increases that errors and fraud related to payroll could occur and not be detected.
Under the plan of action, Bradley said she would send a check register to the judge’s office for review and signature.
*Capital assets procedures need improvement
There were a number of county assets not listed on the inventory and several items were not listed on the insurance coverage list.
Without proper documentation, the county is at risk of not having coverage on all its assets.
Roberts said a capital asset list would be taken from the auditor’s information. Any additional purchases over $5,000 would be added and any surplus items deleted.
*The county has inadequate safeguards with regards to IT management and security
This is the second year that the auditor’s office has cited problems with the county’s IT program.
It was two years ago that the county suffered a cybertheft of over $400,000 from its payroll account.
The auditor listed many of the same issues as last year:
*Lack of consistent use of virus detection and spam filtering
*Lack of processes to identify unauthorized access and to appropriately respond to questionable transactions
*Insufficient management and oversight of computer networks
*Lack of documented policies and procedures related to the responsibility of employees and management of IT resources
*The county does not have a written disaster recovery plan or have processes in place to perform periodic testing of the plan
*No written computer usage policy, including e-mails
*No written policy addressing password privacy and the need for complex passwords that is required to be changed every 60-90 days
Roberts responded that the fiscal court members recently hired Professional Office Solutions to handle its computer issues.
*Internal control policies and procedures relating to federal awards needs improvement
The county does not have a written policy on how to handle federal grants. And many of the departments handle the grant paperwork without going through a centralized office.
The auditor recommends having administrators who are trained to handle the grants and that all such awards must be reported to the judge’s office.
In response, Roberts said she planned to have one person in her office to oversee all grants.
Anyone wishing to see the entire report can go to www.auditor.ky.gov.