GLASGOW – The state auditor's office has released an independent accountant's report on the last 18 months Brad Bailey was Barren County property valuation administrator, noting a few items of interest.
“We have performed the procedures enumerated below, which were agreed to by the Finance and Administration Cabinet, Department of Revenue (DOR), and the former Barren County Property Valuation Administrator (PVA), solely to assist you with the accountability for statutory contribution receipts and disbursements, including capital outlay disbursements, city government receipts, recordkeeping, and leases and contracts for the period July 1, 2017 through November 30, 2018,” the report states. “This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.”
A total of 11 items are listed, with a brief description of the procedure followed by the finding from it. Two of those had findings different from what may have been expected or preferred, but most were consistent with what the accountant sought to confirm.
• Procedure 1 was to determine whether the PVA has a receipts ledger, a disbursements ledger and reconciles bank records to books each month and to reperform the year-end bank reconciliation (November 30, 2018), for all bank accounts, to determine if amounts are accurate.
The finding was that the former PVA “did not have an accurate receipts and disbursements ledger,” and the former PVA performed monthly bank reconciliations, and the Nov. 30, 2018, bank reconciliations were accurate.
A response provided in the audit report from Bailey was that the activity level did not justify a ledger.
• Procedure 7 was to compare the PVA's final budget to to actual disbursements to determine whether the PVA overspent in any account series.
The finding from the comparison of budget to actual disbursements was “the former PVA overspent in two account series.” For the fiscal year ending in 2018, actual expenditures for Operating Accounts (Series 200) were $2,784 over budget, and actual expenditures for Other Capital Outlay (Series 600) were $400 over budget.
No response from Bailey was given for this item.
The findings for the other nine procedures were as follow:
• Procedure 2 – “The payments from the cities have been confirmed and agreed to the former PVA receipts records. The list of city receipts is complete.”
• Procedure 3 – “Payments made by the fiscal court to the former PVA have been confirmed. The budgeted statutory contribution by the fiscal court agreed to the legally required amounts calculated by the Department of Revenue. The fiscal court payments were traced from the fiscal court statutory contribution budget to the former PVA’s local bank accounts.”
• Procedure 4 – “The (15 judgmentally selected) disbursements agree to paid invoices or other supporting documentation and bank records. Disbursements were determined to be for official business. The credit card disbursements were for official business.”
• Procedure 5 – The tasks of comparing capital outlay disbursements with supporting documentation, bank records and proper purchasing procedures; observing newly acquired assets; and determine whether assets were added to the PVA’s Capital Asset Inventory List were “not applicable as there were no capital outlay purchases during the period July 1, 2017, through November 30, 2018.”
• Procedure 6 – “The former PVA’s agreement and contract payments agree to cost schedules and the services rendered were appropriate, for official business, and properly authorized.”
• Procedure 8 – “Time records are completed, maintained, approved, and support the hours worked.”
• Procedure 9 – “Cash balances were properly transferred from the former PVA to the new PVA.”
• Procedure 10 – “The former PVA has on file the completed Ethics Certification Form for newly hired employees, hired between July 1, 2017, and November 30, 2018.”
• Procedure 11 – “The PVA’s office was not closed any days other than the state’s approved holidays.” If it had been, the accountant was to determine whether “the proper procedures and forms were completed.”
The report's conclusion included the following disclaimer:
“We were not engaged to, and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the receipts and disbursements, including capital outlay disbursements, city government receipts, recordkeeping, and leases and contracts. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”
The Glasgow Daily Times phoned and sent a text message to Bailey late Monday afternoon to offer him the opportunity to respond to the findings.
He said the accounts for which there was no ledger were savings and/or investment accounts with very few transactions.
Regarding the budget overages, Bailey said, “The money obviously was there to pay for those things, but the problem was I didn't update my budget" to reflect those amendments and related transfers from other accounts.