State audit finds $132,000 deficit in Owsley clerk's office for 2011

bestep@herald-leader.comJuly 2, 2013 

Sid Gabbard

Former Owsley County Clerk Sid Gabbard had a deficit of $132,305 in his office in 2011, according to an audit released Tuesday.

Gabbard was indicted earlier this year for financial misdeeds found during audits of earlier years, and he agreed in April to resign and pay the state $61,000.

However, auditors had not finished reviewing Gabbard's accounts for 2011, 2012 and part of 2013 before he left office.

The 2011 deficit resulted from money that came into Gabbard's office but was either not deposited in the bank or not recorded, according to the audit.

Gabbard's bookkeeping was so bad in 2011 that the actual deficit might have been higher, according to the new audit.

County clerks collect taxes and fees that help support other local offices. The audit found that in one of the nation's poorest counties, Gabbard shorted the county schools, the library and the health department, among others.

For instance, Gabbard's office owes the county schools $19,804 for 2011, the audit said.

The review showed that Gabbard put $36,000 into accounts for 2011 after the end of the year. If he took that from 2012 receipts, the deficit could go even higher for that year.

As in earlier audits, the 2011 review found a range of poor financial practices in Gabbard's office:

■ He did not comply with standard accounting procedures.

■ He took in $51,890 in delinquent tax payments but did not pay other agencies their share.

■ He withheld money from employees' checks for taxes and retirement but did not remit the money to the Internal Revenue Service or the state and federal retirement systems.

■ $21,438 worth of delinquent tax bills were missing from the office.

Auditor Adam Edelen's office reported the audit's findings to the IRS, the County Employees Retirement System, the state Department of Revenue and the state Attorney General's Office, which prosecuted Gabbard earlier this year.

Gabbard was first elected clerk in 1985. He had a history of poor bookkeeping; auditors have not been able to express an opinion on the accuracy of his financial statements for a decade.

"It is a shame that Mr. Gabbard was able to abuse so much taxpayer money in one of the poorest counties in the country for so long, but I am relieved that he is finally being held accountable for his actions," Edelen said in a news release.

The audit recommended that Gabbard deposit $132,305 in personal funds in the fee account of his old office to wipe out the deficit; that money would then be forwarded to agencies that were shortchanged.

Gabbard did not respond to the audit, but he told the Herald-Leader on Tuesday that he is paying off the deficit out of his own pocket.

"We've got that worked out," Gabbard said.

Gabbard said he did not steal any money from the clerk's office.

He entered an Alford plea in April to state charges of abusing the public trust and filing false tax returns or failing to pay taxes. An Alford plea means a defendant does not admit guilt but acknowledges that there is enough evidence for a criminal conviction.

Gabbard did not receive any jail time, but he had to resign.

County Judge-Executive Ronnie DeBord appointed Shanna Oliver, who had worked for Gabbard as a deputy, to take over as clerk, Gabbard said.

Bill Estep: (606) 678-4655. Twitter: @billestep1

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