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Former Sheriff's Settlement Short $13K; Audit Costs County Over $46K

Former BC Sheriff Joe Gaddie (file photo)

An audit that has lasted over an year and has cost the county over $46,000 recommends that former Sheriff Joe Gaddie transfer $9,604 due the 2010 fee account from the tax accounts, deposit $3,570 in personal funds to cover undeposited receipts and disallowed expenditures, and then pay the additional excess fees of $13,174 to the fiscal court. Auditors have billed the county for 904.5 hours, a total of $46,628.57 for Gaddie's audit. 

According to Gaddie, a former employee, who he did not identify, is repsonsible for taking the funds.  The employee was fired in 2010 for other reasons.  Gaddie, a former KSP detective who served one term as sheriff, said he knew nothing about the missing money until contacted by auditors.

The report of the Audit of the Butler County Sheriff for the year ended December 31, 2009, cited that the Sheriff’s office lacked adequate segregation of duties. The report suggested the following compensating controls to offset the lack of segregation of duties:  the Sheriff or designee should on a regular basis compare the daily bank deposit to the receipts ledger, should compare checks written to the disbursements ledger, and reconcile the monthly and quarterly financial report to the ledgers.

The same problem surfaced again in the 2010 audit. Findings included:

The former Sheriff’s office lacked adequate segregation of duties over accounting functions. Because of the  lack of segregation of duties and because the former Sheriff did not provide strong oversight over the office, the following occurred:

* Appropriate and accurate accounting records were not maintained.

* Receipts were not deposited intact on a daily basis.

* All receipts collected were not recorded.

* Receipts forms were not issued for all receipts collected.

* Receipts were deposited to the wrong bank accounts.

* Proper documentation was not maintained for all disbursements.

* Invoices were not paid within thirty days.

The former Sheriff’s office should have maintained appropriate and accurate accounting records. The former Sheriff did not maintain accurate records for the fee account, and deposited 2010 fee receipts to the 2009 tax account and payroll.

The former Sheriff’s Office should have deposited receipts of the office, intact, on a daily basis and recorded all receipts collected.

* $885 of 2010 receipts collected for auto inspections, CCDW permits, serving papers, and reimbursements of supplies were not deposited to the 2010 fee account

* From  January 1, 2010, through September 13, 2010, deposits were not made intact daily, all receipts collected were not recorded, and undeposited receipts were noted.

* From September  14 until December  31,2010, auditors were unable to determine if some deposits were made intact daily, if all receipts were recorded, and if all receipts were deposited, as receipt forms were not issued for all monies collected and cash check-out sheets were not prepared daily.

The former Sheriff’s office should have issued receipts forms for all receipts collected.

Deposits were found to include payments received where the receipt form was not issued and receipt forms were found that were issued but not included in the daily cash check-out sheet batched totals.

The former Sheriff’s office should not have deposited fee account money in the tax account. A check ($6,300 received from the Butler County Fiscal Court for reimbursement on a federal grant) that should have been deposited to the 2010 fee account was deposited in the 2009 tax account. The deposit was used to cover the deficit in the 2009 tax account as a result of undeposited 2009 tax receipts.

 The former Sheriff had disallowed expenditures of $2,685 in the fee account.

* $2,020 for guns purchased for the personal use of employees of the former Sheriff’s office

* $620 without supporting documentation

* $44 finance charges and late fees assessed on a credit card due to the payments being made late

The former Sheriff’s Office should have paid bills within 30 days.  25 invoices totaling $14,115 were not paid within 30 days as required by KRS 65.140(2)

The former Sheriff  had a deficit of $3,570 in his official 2010 fee account. The deficit was due to undeposited receipts of $885, and the disallowed expenditures of $2,685. This matter is being referred to the Office of the Attorney General for further investigation.

The former Sheriff’s should submit additional excess fees to the fiscal court. On March 14, 2011, the former Sheriff presented his annual settlement to the fiscal court for approval.  Excess fees per the annual settlement were $30,393.  Based on the 2010 audit the known excess fees for calendar year 2010 were $44,476. Thus $13,174 is due to the fiscal court.

According to former Sheriff Joe Gaddie he has spoken with the auditors and they have proof the money was taken by a former employee.

“I am glad this is under investigation, I didn’t know anything about this until I was contacted by the auditors,” said Gaddie.


“I fired the employee in question for insubordination and inefficiency in September of 2010.  I find myself in this tribulation as the result of hiring a secretary that turned out to be a ravenous wolf in sheep’s clothing,” added Gaddie.


“I think the scripture that best fits this situation is Romans 7:21 I find then a law, that, when I would do good, evil is present with me,” said Gaddie.


Audit reports can be found at www.auditor.ky.gov.

 

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