State Auditor: Staff Cuts Hurting Accounting

FRANKFORT, Ky. (AP) - Staff reductions across state government have left accountants straining to keep up with paperwork, Auditor Crit Luallen said.

All too often, Luallen said Wednesday, they've been unable to get their work done.

Luallen released a financial review of state government Wednesday. The review found 74 deficiencies in internal financial controls in a variety of agencies.

Luallen said the agencies blamed staffing shortages caused by the state's shrinking budget. Although the state has avoided layoffs in the budget crunch, attrition has resulted in some 2,000 fewer executive branch employees over the past year. That's according to Jay Blanton, a spokesman for Gov. Steve Beshear.

The review, conducted by a team of 40 auditors, covers the fiscal year ending June 30, 2008.

"During the audit, our staff experienced higher than normal difficulties in the auditing process due to new staff overseeing agency programs," Luallen said. "In the audit, several agencies cite the impact of budgetary issues as the cause of staff shortages that are directly affecting day-to-day work."

Federal law requires an audit of the state's $22.9 billion in expenditures.

Luallen said the Kentucky State Treasury and the Kentucky Cabinet for Health and Family Services were among the agencies that complained of staffing shortages.

Auditors found that the Kentucky State Treasury has not completed a monthly reconciliation of the state's largest bank account since 2006. They recommended that all bank reconciliations be done in a more timely manner.

The team found that the Cabinet for Health and Family Services has not been accurately accounting for children receiving immunization shots at county health departments through a federal immunization grant program. Auditors discovered the problem when they noticed that the cabinet reported only $395,814 for the grant program in fiscal year 2008, down from nearly $18 million in 2007.

"In many instances, our audit captures how budget cuts at all levels have impacted state government's work force and its ability to properly monitor certain areas," Luallen said. "Based on these findings, it's imperative that management take steps to correct these deficiencies before they worsen and cause long-term problems."

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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