The Owsley County clerk failed to send out tax bills totaling nearly $400,000 in 2014, depriving the school system and other agencies of badly needed revenue in one of the poorest counties in the nation, according to a report from state Auditor Mike Harmon.
The audit said county Clerk Shanna Oliver is not fulfilling her statutory duties as clerk, a finding that will be turned over to the state Attorney General’s Office.
Oliver worked in the office for several years under former Clerk Sid Gabbard, whose bookkeeping was so bad for so long that he ultimately faced criminal charges resulting from problems cited in audits.
Gabbard resigned in June 2013 as part of a deal to settle the criminal charges.
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Ronnie DeBord, then Owsley County judge-executive, appointed Oliver to replace Gabbard.
The audit, which covered 2014 and was released Monday, indicates bookkeeping problems persisted under Oliver.
“The beat went on,” Judge-Executive Cale Turner said drily when contacted about the report.
Turner said one troubling finding was that Oliver failed to prepare 31 franchise tax bills after September 2014. Clerks prepare those bills for county sheriffs to send to businesses.
The audit said the bills were for $373,181 in revenue to the school system, county, library, health department, extension service and soil-conservation service, which are known as local taxing districts and have varying tax rates.
Failing to prepare the tax deprived the districts of money, the audit said.
The school system was due $155,397 from franchise taxes. Other amounts included $53,615 for the county, $60,055 for the library and $85,201 for the extension service, which helps with agricultural and other programs.
There are few jobs in the small, rural county, and money for local services is hard to come by.
“We desperately need that money. The school system … they desperately need that $155,000,” Turner said. “That’s a major amount of money for Owsley County, I assure you.”
Turner noted the franchise tax revenue due to the school system would have covered about three teacher salaries.
Oliver did not provide responses to be included in the audit, and efforts to reach her Monday at her office were not successful.
Other findings in the audit were that Oliver did not submit required financial reports to the state; did not give the fiscal court an annual financial statement and excess fees as required; did not get approval of the fiscal court to maximum salaries for her and her deputies, meaning auditors couldn’t tell if salaries were within the allowable limit; and did not send delinquent tax payments to districts as required.
The audit said Oliver’s office did not follow minimum accounting standards. No one in the office kept ledgers showing receipts and disbursements properly, and no one prepared bank reconciliations, the audit said.
Overall, the books were so deficient that auditors could not decide on the validity of receipts and disbursements.
Harmon’s office also referred findings to the state Department for Local Government and Revenue Department.
Turner said he hopes the Revenue Department will require Oliver to prepare the franchise tax bills from 2014 to be sent out.
Gabbard entered an Alford plea to charges of filing false tax returns and abuse of public trust. That meant he did not admit guilt, but acknowledged there was enough evidence to convict him.
A judge sentenced him to eight years in prison but probated the sentence under an agreement for Gabbard to pay delinquent taxes and $61,118 in restitution.