State Auditor Crit Luallen released the audit of the 2006 financial statement of the Caldwell County Sheriff’s Office Wednesday, June 25.

The audit found the sheriff’s financial statement fairly presented the office’s revenues, expenditures and excess fees in conformity with accounting regulations.

Two issues of non-compliance were identified.

The first noted that the office lacks an adequate segregation of duties.

“Due to the entity’s diversity of official operations, small size and budget restrictions, the official has limited options for establishing an adequate segregation of duties,” the audit report stated.

The report recommended the sheriff periodically compare a daily bank deposit to the daily checkout sheet, and compare that to the receipts ledger, initialing each and reconciling any differences.

The audit report also recommended that the sheriff compare quarterly financial reports to receipts and disbursements ledgers for accuracy, compare salaries listed on the quarterly report to individual earning records, reconcile any differences and initial the quarterly report.

In a response included with the audit report, Sheriff Stan Hudson said the office would comply with the recommendations, adding that he had been initialing bank statements as recommended in a prior audit.

The second issue of non-compliance indicated a failure to maintain receipts in accordance with KRS 64.840(2), which requires one copy of each receipt to be given to the person paying the fine, forfeiture, tax or fee, one copy to be retained by the sheriff for his own records, and one copy to be placed with the daily bank deposit.

Auditors, during testing of daily records, noted that receipt books had been disposed of.

Hudson said the books were accidentally disposed of while the office safe was being cleaned out. The incident had never happened before, he added.

The audit indicated excess fees for the year ended Dec. 31, 2006, increased by $59 from the prior year, resulting in excess fees of $181,726.

Revenues increased by $1,829 from the prior year, while expenditures increased by $1,770.

The audit report can be accessed in its entirety online at www.auditor.ky.gov.