‘Not fulfilling her duties.’ State audit blasts this Kentucky county official.

The county clerk in Owsley County has done such a poor job with financial functions that she is in violation of state laws and is not fulfilling her duties, state Auditor Mike Harmon’s office said in a report released Thursday.

The shortcomings in Clerk Shanna Oliver’s office have caused problems for local agencies that depend on tax collections to provide services, the audit said.

For example, Oliver did not prepare 2015 franchise tax bills until 10 to 18 months after they should have been prepared, meaning the county school system, the library, the health department and other local agencies — called taxing districts — didn’t get the tax money owed to them.

The underpayment to the school system alone totaled $54,626 at the end of 2015, according to the audit.

“The county clerk’s failure to perform this duty results in the taxing districts’ budgets and cash flows being negatively affected,” Harmon’s office said in the audit.

The total covered in the late bills was $122,618.

Oliver did not provide responses to the findings, according to the audit, which covered 2015. It took longer than usual to complete the audit because of the problems in Oliver’s books, Harmon’s office said.

Harmon’s office referred findings to the office of Kentucky Attorney General Andy Beshear and to the Department for Local Government.

County clerks in Kentucky collect taxes and fees on a number of functions, such as recording deeds and mortgages, that help support other local services.

The report released Thursday is the latest in a long line of critical audits for the Owsley County clerk’s office.

Bookkeeping under the prior clerk, Sid Gabbard, was so bad that auditors weren’t able to express an opinion on the accuracy of his financial statements for a decade. A grand jury ultimately indicted him over problems cited in audits

Gabbard resigned in June 2013 after being charged and entered an Alford plea to charges of filing false tax returns and abuse of public trust. The plea meant he did not admit guilt but acknowledged there was sufficient evidence to convict him.

A judge sentenced Gabbard to eight years in prison, but probated the term under a deal for Gabbard to pay delinquent taxes and $61,118 in restitution.

Ronnie DeBord, who was then the county judge-executive, appointed Oliver as clerk after Gabbard quit. Oliver had worked as a deputy clerk in the office for several years.

Critical audits have continued under her watch.

Several of the financial irregularities cited in the audit released Thursday were repeat problems from the 2014 audit of Oliver’s office.

That year, for instance, Oliver didn’t prepare $373,818 worth of franchise taxes when she should have, according to an audit.

The 2015 audit cited a raft of accounting problems, including that Oliver did not: submit required reports to the state; present an annual budget or annual order setting maximum salaries for employees; reconcile the office bank account to financial records; turn over some taxes and fees on time after collecting them; distribute delinquent tax payments to other local agencies on time; and have adequate controls that help guard against fraud.

As one example of Oliver’s poor accounting, the audit said there were 49 financial transactions from 2015 that hadn’t cleared the bank by the end of the year. Some had been outstanding for more than seven months.

It appeared the clerk had written checks but not delivered them to other agencies in the county, the audit said.

“The county clerk is not fulfilling her duties as an elected county official . . . and does not have adequate controls in place to ensure financial reporting is timely, complete, and accurate,” the audit said.

This story was originally published June 6, 2019 at 9:38 AM.