Auditors find former employee took $15K from Parks and Rec
Published 9:35 am Thursday, February 1, 2018
An audit of Winchester-Clark County Parks and Recreation uncovered a number of issues within the department, including $64,000 in credit card debt, a deficit for the fiscal year of $158,690 and an employee who had taken $15,000 from the department.
The department was also found to be non-compliant with state statute for not paying vendors within 30 days, by exceeding appropriations for the year and unauthorized payments by an employee.
The audit, dated, Jan. 3, was for the 2016-17 fiscal year, which ended June 30.
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Auditors from Kerbaugh, Bodes and Butler in Danville found a lack of internal control over finances including not preparing financial statements, not reconciling the department’s bank statements monthly and not recording credit card transactions on the department’s general ledger.
The auditors also identified two “significant deficiencies:” that vendor transactions are not recorded properly or identified in expense reports and the budget is not consistent with the general ledger, making it difficult to compare the budget to actual expenses.
The department was using three credit cards with interest rates ranging from 10.99 to 24.99 percent, the auditors said. Credit card transactions were not recorded as expenses either.
Parks Board Chairman Charlie Eury said the board requested the audit, the department’s first, which uncovered the employee theft.
“The auditors were able to catch it,” Eury said. “It was not something we could have caught.”
The employee was confronted, repaid the money to the department and resigned, he said. Criminal charges were not pursued by the department.
Many of the issues in the audit stemmed from that situation and from not having enough oversight for the financial processes in the department, he said.
The $158,690 deficit, Eury said, was partly because there were no budget amendments made during the course of the fiscal year to account for additional revenue. Expenditures were still made and recorded, though.
“We used to do it in the past but we’ve gotten away from it,” he said. The department has reinstituted purchase orders as a way to further document purchases and expenses, he said.
One of the board members now actively participates in reconciling the bank statements monthly, he said, to provide additional oversight.
The department has also restructured its monthly payments from the City of Winchester and Clark County, so there is additional money during the summer and the start of the fiscal year, when payroll and activity are at its highest, Eury said.
One of the credit cards has already been paid off and closed, a second is being paid off but not used further, he said. The third will be paid off and then switched to a 30-day account, so everything will be paid off in a timely fashion.
The current total credit balance is around $50,000, he said.
Much of the debt came from purchasing a zero-turn lawn mower, which has been paid off, and insurance, which was due July 1, he said.
With little cash in the accounts, the credit card was used to pay for insurance coverage, he said. The department has since changed insurance carriers, which can be paid in installments, he said.
Other than the employee theft, Eury said the audit did not contain a lot of surprises.
“(The auditors) made some good recommendations and the board has no problem accepting the report,” Eury said. “Our job at this point is to implement the changes laid out in the report.”