Daily Independent (Ashland, KY)

Local News

June 23, 2014

Elliott County has answers to comments about audit

State auditor’s office also weighs in

Sandy Hook — Files have revealed conflicting instructions for the Elliott County Fiscal Court in handling funds after the most recent audit from State Auditor Adam Edelen’s office and authorization of the county’s budget by the Department of Local Government collided.

Elliott County Fiscal Court Treasurer Heather Stevens provided The Independent with evidence that the court acted in what they thought was an appropriate manner by paying the road patrol salary for the deputy sheriff out of the Road Fund after the DLG approved the budget move.

She explained that after the public pushed to create a deputy sheriff position, the court went to the DLG to ask how to pay the additional salary.

She showed The Independent on Monday the signature of State Local Finance Officer Robert O. Brown on May 15, 2012, that sealed the department’s approval of using money from the general road fund to pay the road patrol salary.

She said the court was also instructed to appropriate money in this way by a manual provided by the DLG.

The header on page 30 of the manual regards the methods of administrative cost allocation to the road fund. Below, it states under Method I, 1.(b), that patrolling for county roads by the sheriff and county police office can be paid 100 percent by the road fund.

As she understood it, she was not doing anything that was not already approved by the DLG.

Yet, in the audit released last week, the first comment stated this act was a “misuse of restricted fund monies.”

“What are we supposed to do when one office tells us to do it this way and the other says it’s wrong?” Stevens asked.

The Independent contacted Edelen’s office Monday to further interpret what misunderstandings may have happened with the state offices and county officials regarding this audit.

Answers are as follows:

Two methods are shown for allocating funds from the road fund into the general fund.

Stevens told The Independent the court utilized Method I. But the auditor’s office said the county used Method II.

“Under this method they transferred $187,107 of road funds to the general fund and could not transfer anymore, since it is limited to truck distribution receipts,” the office said in an email. “They cannot do both methods. As noted from the DLG manual, they have to choose one method.”

Documentation of any appropriation of road fund dollars for administrative costs can be done using one of two methods.

For one, the county can use time sheets completed by the “affected personnel,” or in this case the person receiving the road patrol salary, that also documents material and supply costs.

A second option is to document the percentage of road fund to the total operating budget as applied to allowable line-item categories. This requires preparation and submission of a road cost allocation worksheet.

Stevens and Judge-Executive Carl Fannin said they understand the other comments made during the audit and have already put in place plans for improvement.

The total of road fund dollars appropriated must not exceed budgeted truck license distribution receipts.

When asked if this was a miscommunication between the state auditor’s office and the DLG, a spokeswoman for the auditor’s office ,Stephenie Hoelscher, said, “I wouldn’t say this is a miscommunication between our offices as much as it may just be a misinterpretation by county officials.”

Some of the comments regarding budget deficits show both problems and improvements for the county previously listed by the state as “critical” three years ago.

According to Stevens and Fannin, the county had a $2.3 million debt in 2011, now it is $1.1 million.

When asked how the court was able to pay off $1 million of debt, Fannin said, “Because I take care of the money, I don’t waste it.”

The record also reflects that auditor comments have decreased significantly the past few years, from 23 in 2011 to six in 2013.

LANA BELLAMY can be reached at lbellamy@dailyindependent.com or (606) 326-2653. For Twitter updates, follow @lanabellamy_DI.

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