The State Auditors Office found the financial statements of former Christian County Sheriff Livy Leavell and current Christian County Sheriff Tyler DeArmond fairly represent the taxes charged, credited, and collected.
According to the audit report, the former sheriff’s financial statement fairly represented the taxes charged, credited and paid for the period of April 17, 2018 through December 31, 2018. The auditor also noted no instances of noncompliance in the audit.
Meanwhile, the state auditor’s office says the first audit of Sheriff Tyler DeArmond showed the tax settlement fairly represents the taxes charged, credited and paid between January 1 and April 15, 2019.
Harmon did recommend the Christian County Sheriff segregate duties over the receipts functions at the office if at all possible. The auditor says segregation of duties over these tasks and cross-training deputies is essential for providing protection and asset misappropriation, inaccurate financial reporting, and protects employees in the normal course of performing their daily responsibilities.
Sheriff DeArmond’s response to the audit was the bookkeeper does not collect taxes, however, she does collect Franchise Taxes, which is minimal. He noted the system in place for collecting Franchise Taxes would require an Administrative Clerk to log out of one tax system, log into another system to enter the Franchise Tax, log out of that system and then log back into the regular tax system. DeArmond added that requiring a Clerk to go through this process to simply enter a Franchise Tax, would be more problematic than having the bookkeeper perform the task. Sheriff DeArmond said the segregation of transactions is already in place by each of the Administrative Staff and the transactions are checked by each staff member upon collection, double-checked by the bookkeeper and then checked a third time by the bank when the transactions are deposited. Furthermore, DeArmond stated this same process is used when verifying daily checkout sheets, receipt ledgers, and the monthly reports. He added the need for any further delegation does not present itself when there is already a 3-step verification system in place.
Harmon’s reply to DeArmond’s explanation was the bookkeeper collected franchise taxes, which are a large amount of taxes collected. He added the compensating controls listed in DeArmond’s response were not documented and therefore could not be verified.
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