(Frankfort - November 2, 2011) State Auditor Crit Luallen today released the audit of the 2010 financial statement of the Perry County Sheriff, John Leslie Burgett. State law requires the Auditor to annually audit the accounts of each county sheriff. In compliance with this law, the Auditor issues two sheriff’s reports each year: one reporting on the audit of the sheriff’s tax account and the other reporting on the audit of the fee account used to operate the office.
The audit found that the Sheriff’s financial statement presents fairly the revenues, expenditures, and excess fees of the Perry County Sheriff in conformity with the regulatory basis of accounting.
As part of the audit process, the Auditor must comment on non-compliance with laws, regulations, contracts and grants. The Auditor must also comment on material weaknesses involving the internal control over financial operations and reporting.
The audit contains the following comments:
The Sheriff should consult with the Perry County Board of Ethics regarding seasonal status of the Sheriff's spouse. The Sheriff's spouse was originally employed at the Sheriff's office on July 8, 2008 with a salary of $7,301. During calendar year 2009, the Sheriff’s spouse earned a salary of $18,449 and was classified as a seasonal employee. During calendar year 2010, she worked a total of 1,425 hours earning wages of $21,340. The Sheriff's spouse also worked eleven (11) months of calendar year 2010. According to the Perry County Fiscal Court Code of Ethics, Article IV, Section 1, dated December 21, 1994, a spouse or child of a county officer shall not be initially employed or appointed to a full-time or permanent part-time position in a governmental agency in the same county in which the officer serves. According to the Perry County Fiscal Court Administrative Policy, a Regular Full-Time Employee is an employee who works forty (40) hours per week on a regularly scheduled basis, a Regular Part-Time Employee is an employee who works less than forty (40) hours per week, but on a regularly scheduled basis, and a Temporary or Seasonal Employee is an employee who works in a position which is of a temporary nature, either full-time or part-time. The maximum time limit for temporary or seasonal employees is six (6) months.
The Perry County Ethics Commission met on September 28, 2009 and issued an advisory opinion regarding the employment of the Sheriff's spouse. The Ethics Commission stated the Sheriff's wife is not a "full -time" employee, nor is she a "permanent part-time" employee. Therefore, her situation is not a violation of Article IV, Section 1 of the Perry County Code of Ethics Ordinance. However, since the Sheriff’s spouse worked 11 months during 2010, which is five months beyond the amount of time an employee can work and be considered a seasonal employee, auditors question her classification as a seasonal employee.
The audit recommends the Sheriff consult with the Perry County Board of Ethics to clarify the seasonal status of the Sheriff’s spouse and to specify the amount of time she would be allowed to work during the year as a seasonal employee to be in compliance with the Perry County Fiscal Court’s Administrative Policy and the Perry County Fiscal Court’s Code of Ethics.
The Perry County Sheriff, John Leslie Burgett, responded, “The sheriff has requested that Perry County Ethics Commission issue an opinion which would specify the amount of time a seasonal employee can be allowed to work and not be in violation of the Perry County Ethics Ordinance.”
The Sheriff should pay the balance of $2,043 owed to the Fiscal Court in additional 2009 excess fees. Test procedures conducted during the 2009 audit revealed the Sheriff disbursed funds of $10,775 from the official fee account for a robotic car that is operated by remote control. The purpose of this expenditure was to educate children about the Sheriff’s office, the 911 system, and drug awareness. This expenditure was not considered an allowable expense of the fee account and thereby increased excess fees due the fiscal court by $10,775. In Funk vs. Milliken, 317 S.W.2d 499(KY. 1958), Kentucky's highest court reaffirmed the rule that county fee officials' expenditures of public funds will be allowable only if they are necessary, adequately documented, reasonable in amount, beneficial to the public, and not personal expenses. However, this could have been considered allowable drug awareness/prevention expenditure to be paid from an asset forfeiture account.
During follow-up of the prior year comment auditors found the Sheriff subsequently paid $8,732 of the $10,775 disallowed amount to the fiscal court as 2009 excess fees, leaving $2,043 still due to the fiscal court. The $8,732 was paid on June 27, 2011, which is comprised of $2,712 paid from the Federal Asset Forfeiture Account and $6,020 paid from the State Asset Forfeiture Account
The audit recommends the Sheriff reimburse the 2009 official fee account the remaining balance of $2,043 owed for the prior year disallowed expenditure. Once the reimbursement is made, the Sheriff should then pay the additional excess fees to the Fiscal Court.
The Perry County Sheriff, John Leslie Burgett, responded, “The balance will be paid as soon as the Federal Asset Forfeiture account is brought to the compliant level and a deposit is made.”
The Sheriff pre-paid himself and a part-time employee a total of $2,690 for mileage and per diems of which $2,150 is being questioned as a necessary expense of the Sheriff’s office. During test of expenditures auditors noted the Sheriff paid $4,232 for himself and a part-time employee to attend the National Sheriff’s Association (NSA) Annual Conference in Anaheim, California. Of this amount the Sheriff prepaid himself $2,150 for mileage for using his personal vehicle and $270 for meal per diems, and the part-time employee was prepaid $270 for meal per diems.
Auditors are questioning the mileage payments of $2,150 as being a necessary and reasonable in amount expense of the Sheriff’s office. The Sheriff has an official vehicle that could have been used to travel to the conference rather than using his personal vehicle. Also, through investigation, auditors noted the Sheriff and the part-time employee could have traveled by airplane for approximately half the cost. Mileage was calculated at an in-state rate of forty-three (43) cents per mile for in-state travel and an out-of-state rate of forty-eight (48) cents per mile for out-of-state travel. The out-of-state rate was actually an out-of-state fugitive return rate, and should not have been used.
In Funk vs. Milliken, 317 S.W.2d 499 (KY. 1958), Kentucky’s highest court reaffirmed the rule that county fee officials’ expenditures of public funds will be allowable only if they are necessary, adequately documented, reasonable in amount, beneficial to the public, and not personal expenses.
The Department for Local Government’s “County Budget Preparation and State Local Finance Officer Policy Manual” includes a section, “Handling Public Funds Minimum Requirements Pursuant to KRS 68.210 For All Local Government Officials (And Employees)”, that states “no bonuses, no prepayment for goods or services, and no contribution (Section 3, Kentucky Constitution)”.
The audit recommends the Sheriff discontinue the practice of prepaying for goods and services in the future. The audit further recommends the Sheriff consult with the Fiscal Court to determine if $2,150 in prepaid mileage payments is a necessary expense that is reasonable in amount of the sheriff’s office. If the amount is deemed unnecessary and unreasonable it will become a disallowed expense subject to personal reimbursement by the Sheriff to the Fiscal Court, which will increase excess fees due.
The Perry County Sheriff, John Leslie Burgett, responded, “Sheriff will not prepay for goods and services in the future. However, let it be noted that when comparing total travel expenses by way of air or vehicle we found there was very little difference in cost.”
The Sheriff’s office lacks adequate segregation of duties. This occurs when only one person has control over various elements of a single account, e.g., deposits and payments. The report recognizes that due to the diversity of operations, small size, and budget restrictions, the Sheriff has limited options for establishing a segregation of duties. However, the audit provides the Sheriff with specific recommendations for improvement of procedures.
The Perry County Sheriff, John Leslie Burgett, responded, “The sheriff’s office will do everything possible to maintain good internal controls, taking into consideration the limited amount of staffing.”
The Sheriff’s responsibilities include collecting property taxes, providing law enforcement and performing services for the county fiscal court and courts of justice. The Sheriff’s office is funded through statutory commissions and fees collected in conjunction with these duties.