The 2014 Audit of the Union County Fiscal Court for fiscal year ending June 30, 2014 has been released by the Kentucky Auditor of Public Accounts, which found several instances of inadequate internal controls over capital asset purchases and record maintenance.
According to a news release from State Auditor Adam Edelen, the County’s capital asset schedule was inaccurate and omitted nearly 1.2 million dollars that included two bridges, the repaving of one road, two buildings and 20 pieces of vehicles and equipment. In addition, two items were disposed of (a van was sold and a police cruiser was destroyed) and not removed from the capital asset schedule totaling over 75-hundred dollars. Plus, the County failed to document pertinent information such as serial or vehicle identification numbers of all assets purchased.
Edelen states the County’s normal purchasing procedures of acquiring equipment when it is needed and requested by a County department was not followed citing six pieces of equipment totaling over 97-thousand dollars that was purchased due to the equipment being offered to the County at a good price, which were later seized by Indiana law enforcement. An insurance claim for reimbursement filed by the County was denied by the County’s insurance carrier.
Judge Executive Jody Jenkins’ response on the release states the capital assets policy and threshold were updated at the first court meeting following our original audit exit. A thorough review of all capital assets will be taking place along with a comparison of those items to our insurance policy. All discrepancies will be corrected and we are going to review any assets that have been turned over to other government agencies and make sure they are removed from both our asset and insurance listings which will be completed by the end of the year.
Some of the other findings included the County is insuring 13 buildings and seven vehicles that are not owned by Union County nor is there a contractual agreement for the County to maintain insurance on these items; The County’s Fiscal Court minutes did not document when the County purchased assets for other governmental entities; And the County’s capitalization threshold revision approved in October 2004 did not clearly state the thresholds for other equipment and infrastructure.
Findings also included Union County Fiscal Court did not advertise for bids in accordance to KRS 424.260; Failed to follow property purchasing procedures for small contracts and purchases; Circumvented internal controls by paying Union County Fiscal Court expenses from a Union County First checking account and later reimbursing UC First; And the Union County Jail lacked adequate segregation of duties over the accounting functions.
Judge Jenkins’ response on the report states all purchases will follow Union County’s purchase policy, procurement policy as well as KRS 424.260, and we are doing a review and update of the County’s administrative code and purchase policy which will include in writing updated internal controls.
To review the entire audit findings and Judge Jenkins’ responses go to www.auditor.ky.gov