State Auditor Adam Edelen has released the audit for the 2012 financial statement of former Bell County Clerk Becky Blevins. Due to lack of information, the auditor said he could not express an opinion on the statement and referred it to the Office of the Attorney General.
In the press release, Edelen said Blevins did not provide a management representation letter required by auditing standards, and also did not maintain adequate accounting records of fee account revenues.
Due to these matters, alternate procedures could not be completed to obtain appropriate audit evidence to verify fee revenues, according to Edelen. The lack of this information is the reason why the auditor could not express an opinion.
In his comments, Edelen addressed several non-compliance issues with laws, regulations, contracts and grants. One of the non-compliance issues involved the need to establish an office environment with adequate internal control procedures sufficient to maintain documentation sufficient to complete an audit.
Edelen noted several deficiencies in the financial activities of Blevins’ office that prevented the auditors from determining if the financial statements accurately represent the activity of the clerk’s office during that time.
“Underlying records, in the form of duplicate receipts, were not prepared or not provided for non-AVIS front-line collections such as notary fees, postage fees, marriage licenses, etc., at both the Pineville and Middlesboro offices from January through July 2012,” said Edelen in the audit report comments.
Edelen did say Blevins provided registration certificates to support collections when asked for duplicate receipt documentation. According to the auditor, while registration certificates are sufficient documentation for AVIS collections, it does not provide complete information necessary for daily checkout procedures.
Items that are not included on registration receipts include all front-line collections such as notary fees, postage fees, marriage licenses, etc. Edelen said daily AVIS reports do not include all receipt categories, all of which are necessary to support amounts reported.
“Registration certificates do not identify method of payment, which prevent the clerk’s internal controls from operating effectively,” said Edelen. “For a portion of this period, deputy clerks prepared spreadsheets listing cash and checks received by transaction; however these listings did not identify a numerical sequence of receipts, and did not provide daily collection totals.”
The Attorney General’s Office seized documents from Blevins’ office that included manual checkout sheets prepared during January and February 2012, according to the press release. Edelen said Blevins had not provided manual checkout sheets to the auditors.
According to the auditor, the manual checkout sheets documented another source of daily batched totals available independently of Blevins’ computerized daily reports and receipt ledger and indicated the clerk’s office had another method of daily reconciliation.
“In addition to the lack of documentation available to auditors, entries in the account software were entered manually by the clerk’s office and could be altered at later dates,” said Edelen.
Edelen went on to say the lack of receipt documentation limited auditors’ receipt testing and prevented auditors from ruling out the possibility of additional material unrecorded receipts during that period.
“Fraud risk was raised to a level that could not be overcome,” said Edelen. “In the absence of supporting documentation, we could not determine if financial statements accurately represent the activity of the county clerk’s office.”
The entire audit press release with comments from the auditor can be found on the Daily News website.
Anthony Cloud can be reached at 606-302-9090 or on Twitter @AnthonyCloudMDN.