‘Not fulfilling her duties.’ Audit finds bad bookkeeping by this KY county official.
The elected clerk in Owsley County has performed financial functions badly and shorted other county services of money, Kentucky Auditor Mike Harmon said in a report issued Monday.
Clerk Shanna Oliver failed to make sure her office properly reconciled its bank account, didn’t complete some required reports and didn’t prepare some tax bills on time, the audit found.
Oliver also failed to close out her 2016 and 2017 fee accounts as required, leaving $28,513 owed to the county for 2017 and $11,272 for 2016, the audit said.
Clerks offices in Kentucky prepare tax bills and collect fees that support schools, libraries and other services.
Harmon’s office said it would refer findings for further potential action to the office of Attorney General Daniel Cameron, the Department of Revenue and the Department for Local Government.
“The county clerk is not fulfilling her duties as an elected county official,” the audit said.
Oliver did not provide a response to the findings to Harmon’s office, and did not return a telephone call seeking comment.
However, Judge-Executive Cale Turner’s office said Oliver had caught up the back payments owed to the county from 2016 and 2017 since field work on the 2017 review was completed last year, though the payments were late.
Owsley County is one of the poorest in Appalachia and the nation. Every dollar of tax revenue is vital in providing services, Turner said.
“That’s important to us,” said Turner, a Democrat.
The latest audit, covering 2017, was the fourth in a row that Harmon’s office has referred for possible follow-up by other state agencies, but the clerk’s office has been dogged by critical audit findings under Oliver and her predecessor for more than a decade.
Harmon, a Republican, said his office conducts annual training for local officials and that audit reports provide recommendations on how officials can improve financial practices.
Sometimes local officials make improvements based on audit findings, but “in the case of Owsely County, sometimes they don’t,” he said.
Oliver’s office has few employees, but officeholders can adopt procedures to guard against mistakes and fraud even without many employees, the audit said.
The audit released Monday said Oliver’s office did not submit quarterly reports to the state Department for Local Government as required, and that the quarterly report she provided to auditors was wrong.
It also said she didn’t reconcile her bank account to financial records. There were 33 transactions from 2016 that hadn’t cleared the bank by the end of the year, the audit said.
The audit said it appeared Oliver’s office was writing checks but not mailing or providing them to taxing districts in a timely manner.
The risk of fraud and mistakes increases when financial records aren’t prepared and reconciled in a timely way, the audit said.
Other problems cited in the audit included that Oliver didn’t distribute some fees and taxes to the state, county and local agencies on time.
For instance, she didn’t pay deed transfer taxes to the county on time, still owing $6,218 for 2017.
Failing to pay the taxes on time “puts unnecessary financial strain on the county, could impact financial decisions, and impair the ability to provide services to citizens and taxpayers,” the audit said.
Oliver’s office paid delinquent tax collections for some months in 2017 as late as January 2019, nearly two years after the money should have been handed over, the audit said.
As of May 2019, there were still two payments outstanding.
Oliver’s office also didn’t distribute tangible tax payments on time or prepare franchise taxes on time, meaning the school system and other services didn’t get the money on time.
Oliver doesn’t devote enough time to financial reporting and hasn’t put policies in place to make sure the office distributes tax collections on time.
“The county clerk is in violation of many statutes that govern fee office operations, the audit said. “Most importantly, taxing districts (state, county, school, library, health department, extension district, conservation, etc.) are owed substantial amounts of taxes and have been deprived of these resources for a significant time.”
Oliver was a deputy clerk under the prior clerk, Sid Gabbard, whose bookkeeping 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.
He received a probated sentence as part of a deal to pay restitution.
Oliver was appointed to replace him and has since won election to the office.
This story was originally published February 10, 2020 at 11:57 AM.
