Owsley County Clerk Sid Gabbard has handled his office accounting so poorly that the state attorney general should investigate, according to Auditor Crit Luallen's office.
Luallen referred seven findings of mismanagement to the attorney general's office in the 2007 audit of Gabbard's office. The audit was released Monday.
Among other things, the audit said Gabbard paid his deputy clerks more than the fiscal court allowed; had some disallowed expenditures, such as more than $1,000 in bank overdraft fees; didn't manage the financial affairs of his office; didn't make bank deposits daily; and didn't split bookkeeping duties among enough employees to have adequate safeguards.
Gabbard even shorted himself on his salary. He was paid $59,218 in 2007, but the legal maximum for his office was $60,958, the audit said.
The auditor's office said it couldn't confirm the accuracy of Gabbard's financial statements. It is the seventh year in a row the auditor's office has issued such a "disclaimed" opinion about the office.
"Our audits continue to point out the ongoing deficiencies in the clerk's office that have created an environment of mismanagement at the public's expense," Luallen said in a statement. "The taxpayers of Owsley County expect their tax dollars to be properly handled without waste and with zero suspicion of fraud or abuse."
In an interview, Gabbard blamed the problems on not having money to hire enough deputy clerks. Owsley County is one of the poorest in the state.
"That's what it is — not enough money to hire the workers," said Gabbard, who has been clerk 23 years.
The office has one full-time deputy clerk and one part-time clerk in addition to Gabbard, Luallen said.
Luallen said that staffing level is not unusual for a small, rural county. Gabbard could comply with accepted financial practices even with a small staff, she said.
In responses included with the audit, Gabbard said he would correct the problems.
However, the report noted that auditors have been making recommendations for eight years on how Gabbard could "easily correct his poor financial practices," but he has made "virtually no attempt to correct even the most basic issues."
In an interview, Gabbard acknowledged problems in bookkeeping in his office, but said the office works well enough for Owsley County. The audit makes the situation seem worse than it really is, he said.
"It's not near as bad as what it sounds," he said.
Owsley County Judge-Executive Cale Turner, however, said Gabbard's office has been more of a drain on county finances than necessary.
One reason is that the county pays the bill for audits of the clerk's office.
Auditors have had to spend much more time poring over Gabbard's finances than in counties where officials keep better records, meaning it has cost more to audit Gabbard's office than others, even in more populous counties.
The average cost to audit a clerk's office in Kentucky is about $6,000; the bill in Owsley County for the last two audits was about $20,000, said Beth Francis, audit manager in Luallen's office.
Turner said money in the county of 4,800 is tight. The fiscal court did not replace a deputy sheriff and the county treasurer after they left because of a lack of money, Turner said.
"That's money that we shouldn't have to be paying for an audit," Turner said of the extra cost of auditing Gabbard's office. "We scratch for pennies."