Oldham County’s new Judge-Executive, David Voegele, has barely been in office 90 days, but has been kept busy cleaning up the mess left by his predecessor. Faced with an almost empty treasury, he and the other members of Oldham County Fiscal Court have been searching for ways to continue delivering needed services to a county strapped for funds. And, now, State Auditor Crit Luallen has released a critical audit of the financial statements of the Oldham County Fiscal Court for the fiscal year ended June 30, 2010.
Louisville’s sleepy neighbor to the immediate Northeast, Oldham County is home to a number of lovely bedroom communities wherein many Louisville ex-pats reside in bucolic comfort. It is also the home of Kentucky State Reformatory, wherein several of Louisville’s crooked political types have resided, from time to time. And Oldham County politics has traditionally been genteel; in contrast to Louisville’s bare-knuckle brawling. Oldham County politicians have always preferred to deport themselves as ladies and gentlemen; but the current fiscal crisis is starting to wear on the nerves of some of them.
The audit found that Oldham County Fiscal Court lacks sufficient central grants management, and during the audit of federal awards, auditors noted a lack of segregation of duties between program management and financial accountability. “Both program mangers and financial administrators need to be aware of applicable federal compliance requirements and receive training when necessary” Luallen reported.
Additionally, auditor noted:
- Oldham County Fiscal Court does not have complete, organized records or grant files to support grant activity.
- A lack of adequate communication between the department overseeing the grant and the Chief Financial Officer.
- Due to a lack of centralization of grant management, the Schedule of Expenditures of Federal Awards (SEFA) that the county initially provided did not include all grants.
The audit makes numerous recommends to improve oversight:
- Internal controls over cash management, matching, and reporting for the Highway Planning and Construction Grant need to be improved.
- There were two reimbursement requests submitted for Louisville’s Transit Authority of River City (TARC). On these requests, the amount requested for reimbursement was reduced by the 20-percent match. This was incorrect due to the fact that TARC only billed Oldham County Fiscal Court for 80 percent of the costs per the grant agreement. For example, on the request dated Oct. 15, 2009, Oldham County Fiscal Court requested reimbursement for $179,712 and should have requested $224,640.
- Oldham County Fiscal Court did not have sufficient internal controls over the Curry’s Fork Grant to ensure compliance with federal grant requirements.
- Auditors found internal control deficiencies in allowable costs, cash management, suspension and debarment, and reporting.
- Auditors found non-compliances with cash management and suspension and debarment.
- During testing for allowable costs, of thirteen invoices tested, auditors noted that six were paid from copies.
- Auditors reviewed three reimbursement requests submitted during the audit period. Two of the three reimbursement requests included invoices that had not yet been paid by Oldham County Fiscal Court, totaling $72,857.89.
- While reviewing quarterly reports, auditors noted that none of the four reviewed were submitted timely and there was no evidence of knowledgeable supervisory review of the reports before submission.
- Oldham County Fiscal Court did not have sufficient internal controls over the ARRA – Edward Byrne Memorial Justice Assistance Grant to ensure compliance with federal grant requirements.
- Auditors noted internal control deficiencies and non-compliances in cash management at the Oldham County Police Department. Due to poor internal controls, federal funding could be reduced in future years.
Former Oldham County Judge/Executive Duane Murner responded to these findings in the audit, saying “A more centralized approach to manage all financial aspects of all Grants will be implemented. A centralized file in the Judge Executive office had been established, but it was noted that files are being removed without being properly signed out. We will change to a locked cabinet, where removal of files will require a request to the executive assistant, with proper documentation.”
Other findings in the audit include:
- The Fiscal Court should require the depository institution to pledge or provide sufficient collateral and enter into a written agreement to protect deposits.
- Internal control over payroll should be strengthened.
- The Jail Commissary lacks adequate segregation of duties over receipts and expenditures.
In an exclusive interview with hornface.com, Oldham County Attorney John Carter said that the new Fiscal Court, led by County Judge/Executive David Voegele, is in the process of implementing all of the suggestions and modifications recommended by the state’s audit report, and that the new administration will be working diligently in the next few months to correct the mistakes of the past. “It took our predecessors four years to mess things up, and we haven’t been in office for four months yet,” remarked Carter.
Read more: Click here to get your copy of the complete Audit Report (115 Pp., .pdf)