State Auditor Adam Edelen has released the audit of  the 2013 tax 

settlement for Wayne County Sheriff Charles Boston.

    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.

    Recent changes in auditing standards require the auditor's letter to 

communicate whether the sheriff's settlement presents fairly the 

taxes charged, credited and paid of the Wayne County Sheriff in 

accordance with generally accepted accounting principles.

    The sheriff's settlement is prepared on the regulatory basis, which 

is described in the auditor's opinion letter. Regulatory basis 

reporting for the sheriff's settlement is an acceptable reporting 

methodology, and this reporting methodology is followed for all 120 

sheriff settlements in Kentucky.

    The audit found that the sheriff's financial statement fairly 

presents the taxes charged, credited and paid for the period April 

16, 2013 through April 15, 2014 in conformity with the modified cash 

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 comment:

    The sheriff's office lack adequate segregation of duties over 

receipts. A lack of segregation of duties existed over the receipt 

function of the sheriff's office because of a limited number of 

employees were available to properly segregate these job duties.

    The sheriff's office employs two deputies who rotate duties. 

However, both office deputies open mail, receive cash from customers, prepare the daily checkout sheets, post to the receipts ledger and prepare the daily bank deposit.

    The auditor did note the daily checkout sheets are reviewed by 

someone each day. Although this is a compensating control and is 

acceptable, it does not offset the lack of adequate segregation of 

duties over receipts.

    Lack of segregation of duties increases the risk of misappropriation 

of assets, errors and inaccurate financial reporting. To adequately 

protect employees in the normal course of performing their duties and/or prevent inaccurate financial reporting or misappropriations of 

assets, the sheriff should separate the duties involving collection 

of cash, deposit of cash, and posting of receipts.

    If, due to a limited number of staff, that was not feasible, strong 

oversight over those areas should have occurred and involved an 

employee not currently performing any of those functions. The 

individual providing this oversight should initial the source 

documents as evidence of this review. The sheriff could provide this 

oversight.

    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.

    The audit report can be viewed on the auditor's website.

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