Trigg County Treasurer Lucy Kyler said a loan that was co-signed a few years ago by Trigg County Fiscal Court is being paid off.

But it’s not being paid by the fiscal court.

“We can consider it part of our debt, but it’s not ours to pay back,” said Kyler of the funds related to a financing agreement on the Pennyrile Area Development District building.

The funds were among several items that received comments during a state audit of the fiscal court’s financial statement for the recent fiscal year ending on June 30, 2020.

In regard to those funds, the audit noted that the court failed to report more than $7 million in outstanding debt obligations and that it failed to budget for those debt obligations.

That $7 million in debt obligations was related to Trigg County Justice Center bonds and the financing agreement on the PADD office building.

Kyler said the audit itself was a clean audit, a term the treasurer said means that all the money is accounted for and that what the fiscal court is doing is legal and substantial.

Of the $7 million, she noted that it is not missing but is “100% accounted for,” she said.

“Obviously, we’re going to try to do everything we can to take care of some of those things,” she noted of the comments.

State Auditor Mike Harmon’s office also made comments on the fiscal court’s failure to implement adequate controls over off-site collections, maintain adequate documentation to support payroll disbursements, prepare a financial statement for the public justice center corporation fund, accurately reconcile bank accounts and have adequate controls over the health reimbursement account program.

Additionally, the audit commented that the fiscal court lacked an adequate segregation of duties over receipts and financial reporting, overspent in two funds due to an unbalanced budget being presented on the fourth quarter financial report and failed to maintain adequate internal controls for alcohol beverage control receipts.

ALCOHOL RECEIPTSOf the alcohol beverage control receipts, Kyler explained that they were misplaced in a box containing receipts for the 2018-2019 audit, and she noted that auditors did contact some stores firsthand and found that “what the stores said, matched with what I said.”

References to off-site collections in the audit comments referred to money the county receives for concession sales, rentals at the Trigg County Recreation Complex and recycling fees from the local Jesse Thomas Recycling Center. Auditors noted that receipts from off-site locations are at greater risk of misappropriation; both Kyler and Trigg County Judge-Executive Hollis Alexander said multiple people are involved in collection of receipts.

Kyler noted, for example, that the recycling center’s employees record items brought into the center, a report is brought to her by Trigg County Solid Waste Coordinator Jesse Thomas, and she signs off on the report.

In his response to the audit comment, Alexander said any receipts from a source other than the mail are signed off by at least one other employee and Kyler. Receipts from the recreation complex are brought in by the complex director, and the money is counted first by the administrative assistant to confirm wha the director has brought in and again by the county treasurer. Rental receipts from the recreation complex are brought directly to Alexander’s office. Receipts are given to the person who brings the money in, and it is subsequently counted by both the administrative assistant and county treasurer.

In regard to auditor comments about payroll disbursements, Kyler noted that the county did not have properly filled-out timesheets for a few employees who were getting paid during the coronavirus pandemic.

“We didn’t know what was happening or what was coming at that time,” she said.

The judge-executive noted in his response to the audit comments that hours given to Kyler before the timesheets were presented “did not properly match up,” and he said the treasurer would ensure in the future that hours align with what managers and supervisors submit.

He also noted that some hours were altered because of COVID-19. Alexander added that the pay scale was updated this past May to ensure all employees are paid within the scale.

Among other things in regard to payroll, the state auditors noted that five out of 18 employees were compensated for hours not actually worked. One employee was paid 48 hours for each pay period in a particular month but only worked 25 hours the first pay period and none the second pay period.

Another employee was paid 50 hours for a pay period when the timesheet documented the person only worked 22 hours in that time.

THE FIRST TIMEKyler said the recent auditor’s comments was the first time the county has received any comments about payroll disbursement, and she noted in regard to a comment on the public justice center corporation fund that what she had been doing for the county’s private auditor had been sufficient.

“The auditor we had before felt like it was sufficient,” Kyler said of comments that the court maintained ledgers related to the justice center fund but did not prepare an annual financial statement.

“The county treasurer was not aware that an official financial statement was required to be prepared on the justice center fund,” auditors noted in their comments about the court.

Kyler pointed to comments about an adequate segregation of duties for receipts and financial reporting and noted that it is difficult to have everything segregated in a smaller office.

Of the PADD loan, the treasurer said Trigg County has the best bonding capacity in the Pennyrile region and was asked to help with the building project.

“They needed to borrow our bonding capacity because the PADD office is not able to do it on their own,” she said, adding that PADD gets the financial statements and makes payments on the loan on a regular basis.

Alexander also clarified in a fiscal court meeting on Monday that the court has no control over $6 million of that $7 million that is related to the justice center bonds, and he said it had never been commented on by auditors in the past.

“It’s not anything missing. It’s not anything that’s not reported there in the debt part of that,” he told the fiscal court maagistrates of the $7 million.

Kyler said the comments in the audit report essentially mean the county should do those things in a better way, and she said officials will do what they can to address some items.

Some things, like having adequate controls over the health reimbursement account program, would be difficult, she said.

“How do you know they’re spending that amount at a doctor or pharmacy?” Kyler asked, noting that she gets information on the final balances left in those accounts.

The treasurer said the state audits are beneficial for the county and residents as well, helping county officials stay on top of what they do and ensuring the public that what the office says it’s doing is what is being done.

“We want everybody to have that security that the money that’s going through that office is being taken care of,” the treasurer said.

Reach Tonya S. Grace at 270-887-3240 or tgrace@kentuckynewera.com.

Reach Tonya S. Grace at 270-887-3240 or tgrace@kentuckynewera.com.

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