A report released Wednesday by Kentucky Auditor of Public Accounts Mike Harmon continues to detail problems found with the finances of the previous administration of the Pike County Fiscal Court.
According to a statement released by Harmon’s office, the audit of the county government, focused on the financial statements for the fiscal year ended June 30, 2018, under the administration of former Pike Judge-Executive Bill Deskins.
Many of those issues, the statement shows, were linked to the financial management of former Treasurer Johnda Billiter, and officials said this week that the problems have since been resolved.
Frankie Stacy, who became treasurer three weeks before the end of that fiscal year, acknowledged the issues found during Tuesday’s meeting of the Pike County Fiscal Court, but said that they have been dealt with.
“I would like to say that, of all the audit findings for that 2018 audit, they’ve all been resolved,” he said. “The auditors are actually here now doing our 2019 audit.”
During the meeting, Pike Judge-Executive Ray Jones acknowledged Stacy’s work in dealing with the problems detailed in the audit, particularly considering the condition of the county’s finances at the time Stacy took over as treasurer in June of last year.
“I know it was cast upon you in a very bad set of circumstances and you were able to get a lot of work done in order to keep the state from coming in here and taking over county government,” Jones said.
Included in the audit findings, according to the statement from Harmon’s office, were:
• The fiscal court did not perform bank reconciliations each month. In the response, the county noted that all bank reconciliations were completed by June 30 of this year by Stacy and that all bank reconciliations are current.
• The fourth quarter financial statement reflected budget amounts that did not agree to the original budget approved by the Department for Local Government and budget amendments were recorded that were not approved. In that finding, Harmon’s office noted that Billiter had made changes to the original budget in the accounting system that Stacy was not aware of and he was not left with enough time to go through the process of getting an approved budget amendment once he was appointed. That, the current administration noted, has been corrected in the 2018-2019 fiscal year.
• The fiscal court did not report certificates of deposit on their fourth quarter financial reports. The CDs, the auditor found totaled more than $3.7 million and are funds restricted for the post-closure costs of the Ford’s Branch Landfill. The current administration noted in their response that, as of the March 2019 quarterly financial statement, the CDs are being reported.
• The fiscal court did not accurately report debt on their fourth quarter financial report. As a result, Harmon’s office said in the report, the county overstated its long-term and short-term debt by a total of nearly $4.1 million. That debt, the current administration noted in its response, is now accurately being reported.
• The fiscal court did not properly budget for and record all debt-related disbursements. That, Harmon’s office wrote, was related to a lease purchase agreement in the amount of $189,121 and a short-term lease in the amount of more than $1.4 million for the purchase of trucks, neither of which was budgeted or recorded by Billiter. That, the current administration, has been resolved.
• Disbursements exceeded approved budget appropriations for the county’s road fund by nearly $1.1 million. For the 2018-2019 fiscal year, the current administration reported, disbursements in all funds have been properly budgeted.
• The fiscal court did not maintain detailed reports of all receivables due from component units. That, Harmon’s office noted, resulted in the county being owed $784,825 by the Interlocal 911 Board and $392,366 owed by the Pike County/Pikeville Airport Board. Those debts, the current administration noted, have been paid.
The county’s financial issues resulted in numerous repercussions prior to Stacy taking over as treasurer, including the loss of the county’s bond rating by Standard and Poor’s Global Ratings.