State Auditor Mike Harmon recently handed down the audit for the financial statement of the Harlan County Fiscal Court. While the audit is clear of any major issues, the auditor did find a couple minor problems regarding internal controls over waste removal collections and bidding practices from the jailer.

According to a press release, the jailer did not comply with bidding requirements set forth by Kentucky Revised Statute. The jailer paid a total of $33,275 to a single vendor for electronic cigarettes purchased for resale through the jail commissary fund without obtaining bids.

The press release states jail commissary purchases of electronic cigarettes consisted of 11 separate purchases from the same vendor, all less than $20,000 each.

“When doing our own research into which ecig vendor to use, we only came into [vendor 1] and [vendor 2]. We received free samples of each product to let certain inmates try to get an inmate perspective of what type was desirable,” said Harlan County Jailer B.J. Burkhart. “The [vendor 2] samples leaked upon arrival and were not tamper-proof in any way. The [vendor 1] were tamper resistant, and in our facility the inmates all chose [vendor 1] as the viable option in flavor between the two. At that time, [vendor 1] was also the least expensive option.”

In his reply, the auditor stated that, due to the dollar amount of purchase, the jailer was required to advertise for bids for the electronic cigarettes.

In regards to internal control over waste removal collections, the auditor states the fiscal court failed to implement controls to ensure compliance with requirements of the Solid Waste Franchise Renewal Agreement.

According to the release, the fiscal court does not have written agreements with districts for garbage collections, receive delinquent lists for all outstanding collections, or receive sufficient documentation of garbage fees collected by all the utility districts.

“As of June 30, 2018, the fiscal court is aware of at least $699,079 in accounts receivable for collection of residential and commercial solid waste throughout Harlan County. Utility districts do not provide monthly collection reports or lists of delinquent residents to the fiscal court,” the release states. “As such, the fiscal court cannot verify the amount of gross residential garbage removal fees collected by the districts or the amount of garbage removal fees remitted to the fiscal court.”

The auditor stats the lack of delinquent lists prevents the fiscal court from effectively monitoring uncollected revenues. The state recommended the fiscal court enter into written agreements with the utility districts detailing record keeping requirements for waste collections, monthly financial reports and delinquent listings.

“From January 2015 through June 30, 2018, over $4.5 million has been paid to the fiscal court for garbage service. In that same period, $699,079 became delinquent. This places the county at over an 86 percent collection rate,” said Harlan County Judge-Executive Dan Mosley. “We believe this to be in line with other collection services and consider it to be a good collection rate. The court will work with the county attorney and the districts to prepare a written agreement and enter into a contract with all districts for garbage collections.”

The press release states that, as a whole, the fiscal court’s financial statement is fairly presented in conformity with the regulatory basis of accounting.