PRESTONSBURG – The release of recent audits for Floyd County Clerk and Sheriff reported a few deficiencies within the internal controls of the agencies.
The audit uncovered two deficiencies within the County Clerks office with relation to employees receiving payroll advances and the overall oversight of the payroll processing.
The audit states that the bookkeeper, Cathea Newsome, did not have health, life, and dental insurance totalling $1,584 withheld from her pay. Based on their review, the auditors noted that the bookkeeper did not withhold the correct amount of money from her pay, thereby increasing her overall salary and reducing fees due to the fiscal court.
The Clerks office had only recently been having to account for their own health, life and dental insurance. Prior to 2014 that had been a function of the fiscal court to maintain those with-holdings for all county employees.
Waugh says that when he asked Newsome about the discrepancy, she apologized for the mistake and resigned immediately.
“That’s the bottom line of what it was,” said Waugh. “They wrote me up because I didn’t catch it, I guess.”
Newsome paid back the money.
Waugh says that at the time the questionable discrepancies were found to have taken place, Newsome’s husband was undergoing Cancer treatments. Waugh says he believes that strain led Newsome to make a mistake.
“What she was going through with her husband, he’s dieing of cancer. She’s going there, and going back and stuff like that. She’s missing so many days and trying to get caught up,” said Waugh. “When you’re like that I think you could see an extra $200 in your check and not think anything about it.”
Waugh added that there was nothing in Newsome’s work history that would ever have suggested she was untrustworthy.
“I hate it man. For ten years she was a very good employee. She’s been through all those audits and never had a problem.”
Also in the audit was a discrepancy in that several employees were paid in advance before the work was performed, with some of the advances being authorized by Floyd County Clerk Chris Waugh, and some not.
The audit reports that the Clerks bookkeeper advanced her payroll checks nineteen times out of twenty-four pay periods. Some of the payroll checks were advanced as many as twenty-two days in advance of the pay date.
Payroll disbursements paid before work is performed is a violation of KRS 68.210 section 3 of the Kentucky Constitution.
Chris Waugh says that he had let employees take advances if they had vacation time to cover it.
“There was no way I could lose. If they quit me. Or if they fell over dead. I was covered,” said Waugh. According to Waugh most of the advances were only for a few days, but there were others that were too long and there was not enough vacation time to cover it.
Waugh says that the county lost no money as a result of the discrepancies, and that he has ended payroll advances, and is currently acting as his own bookkeeper to ensure there are no more questions of impropriety.
An audit was also returned for the Floyd County Sheriff’s office which listed only one deficiency in internal controls. According to auditors, the “Sheriff’s internal control structure lacks adequate segregation of duties.”
The audit notes that this deficiency results when one employee is responsible for not only custody of assets, but also for recording financial transactions.
Sheriff John Hunt said that the audit pointed out what every small government office in the state knows, “that we don’t have enough employees.” Hunt says that he has made necessary changes to add more checks and balances into the system, including interjecting himself into more of the business office dealings.
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