The county clerk in Madison County allowed delinquent taxpayers to renew vehicle registrations, which is against Kentucky law, according to a state audit released Wednesday.
The audit also found that County Clerk Billy Gabbard overrode internal controls so he did not have to pay registration on his personal vehicle, that payroll in the county clerk's office was not properly documented and reviewed, and that passwords and computers in the office were not secure at all times.
State Auditor Crit Luallen has referred the findings to the state attorney general's office for further investigation. Gabbard, who was elected Madison County clerk in 2002, was not available for comment Wednesday. A deputy in the office said he was attending the Kentucky County Clerks Association conference.
"We are concerned any time public records are altered in a way that overrides existing controls that are in place to ensure proper oversight of tax dollars," Luallen said. "That's why we are asking the AG's office to determine if further review is necessary."
According to the audit, Gabbard had motor vehicle records altered so two residents — including one who is related to him — could renew their vehicle registrations, even though they had delinquent taxes.
In one case, a resident seeking to renew a vehicle registration had delinquent tax liens on other vehicles. Gabbard instructed a deputy clerk to change the Social Security number on the person's record and remove the issue of delinquent taxes, the audit said. The resident paid the taxes on the vehicle, and Gabbard instructed the deputy to change the Social Security number back, the audit said.
Likewise, a relative of Gabbard — who is not identified in the audit — went to the office to renew a vehicle registration but had a delinquent tax lien on another vehicle. The relative's Social Security number was changed, removing the delinquent taxes. The relative paid the registration, and Gabbard instructed the deputy to change back the Social Security number, according to the audit.
"The county clerk should never intentionally alter public records in order to override the controls in place and allow someone with delinquent taxes to renew their registration without first paying the delinquent taxes owed," the audit said.
In a formal response to the audit, Gabbard said this was not a general practice. He said "at clerk's discretion" it might be deemed necessary, but only with his approval.
In another matter, the audit found that Gabbard used a passenger decal on his personal vehicle from July 2008 through January without renewing his registration and paying for the decal. On Jan. 6, Gabbard renewed the registration and paid. However, even though the registration was delinquent, Gabbard had a deputy clerk waive the penalty and interest, which should have been charged, the audit said.
"Having the county clerk override the internal controls in place personally creates an atmosphere in the office that controls can be circumvented at will, and could lead to others trying to do the same," the audit said.
Gabbard responded that "due to excess mileage of the vehicle, the clerk inquired" of the Madison County property valuation administrator of the excessive value. The original amount was paid, even though it was $12,000 more than the value estimated by the National Automobile Dealers Association book.
State auditors also noted that passwords and computers in the clerk's office were not secure at all times. In some cases, the deputies had not logged out or shut down their computers overnight, thus allowing others to conduct transactions on computers that were not their own. Also, Gabbard would ask deputies for their passwords when his had expired or when he was locked out so he could obtain access to the system, the audit said.
Passwords should not be shared, and computers should be secured at all times, the audit said. The audit recommended that computers should be logged off when not in use or when deputies are not there. "We also recommend the clerk and deputies never share their passwords," the audit said.
In his response, Gabbard said, "All computers are password protected."
The audit also found problems with payroll. For example, employees did not sign timecards, and supervisors and the county clerk did not document their review or approval. In some cases, documented overtime was not paid, and adjustments to timecards were not properly approved by management. In other cases, timecards did not accurately reflect the time worked.
The audit recommended that Gabbard ensure that all timecards are signed by employees and supervisors, that timecards reflect actual hours worked each day, that any adjustments are approved and that overtime is paid to eligible employees.
Gabbard said all timecards have been reviewed in the past. "However, we will now require the employees' and reviewers' signatures."