Courtesy of www.kentucky.com
FINDING COVERS 2003-2005
Laurel sheriff's office had deficit exceeding $80,000
By Bill Estep
SOUTH-CENTRAL KENTUCKY BUREAU
LONDON - The Laurel County sheriff's office had a deficit of $81,271 at the end of 2005, state Auditor Crit Luallen has announced.
That was a cumulative total for calendar years 2003, 2004 and 2005, according to a release from Luallen's office. Sheriff's offices are not supposed to end the year in the red.
The audit findings come at an inopportune time for Sheriff Gene Hollon, with elections for local offices a month away. Hollon, a Republican, is facing a challenge from Democrat Fred Yaden, the commonwealth's detective for Laurel and Knox counties and a retired state probation and parole official.
Hollon said yesterday the audit work was conducted months ago and charged the findings were released now to hurt him in the election. Yaden and the auditor are both Democrats, Hollon noted.
"It's political," he said.
Jeff DeRouen, spokesman for Luallen, flatly denied that. The auditor's office has a statutory duty to examine the books of county clerks and sheriffs; it does not take politics or campaigns into account in doing that work or when it releases the findings, DeRouen said.
But Yaden said he hopes the audit will have an effect on the race. The financial administration of the sheriff's office is a legitimate issue for voters to consider, he said.
"People are extremely upset about it -- the money and the accountability," he said.
Hollon said it's important to note there is no money missing from the sheriff's office.
"They're not saying the sheriff stole any money. Everyone knows I didn't do that," he said.
The deficit was among more than 20 financial or accounting problems noted in the 2004 and 2005 audits of Hollon's office, released this week.
The audit recommended Hollon make up the $81,271 deficit, which is owed to the county fiscal court, out of his pocket.
Other findings included were that the sheriff's office paid more than $11,000 in health insurance premiums in 2004 and 2005 for people who no longer worked in the office; sometimes paid premiums for two or three months on new employees before beginning any withholding from their checks; paid more than $4,000 in checking-account penalties in 2005 because of poor bookkeeping; and had other accounting problems, such as inadequate controls over spending and employee time records.
The audit also said that Hollon's department paid more than $5,000 in each of the two years for work on its vehicles to companies owned by an employee of the department.
Hollon told the auditor's office there was no intentional wrongdoing. Much of the deficit was related to interest the sheriff's office paid on money borrowed to operate before tax revenue starts to come in in the fall, Hollon said. The auditor's office disallowed that expense, he said.
The problem of paying insurance premiums on former employees was an error by the insurance company, not his office, Hollon said.
Hollon said he has fixed the problems noted in the audit and has worked with the fiscal court to resolve the deficit.
DeRouen said Luallen's office has released audits of 74 sheriff's offices this year; only five noted deficits, and three of those were in the audits of Hollon's office.
"Any deficit in an account like this is too much," he said. | 
