FRANKFORT, Ky. (KT) - A special examination by State Auditor Mike Harmon’s office of the Trimble County city of Bedford includes one finding that is being turned over the attorney general’s office for investigation.
According to their report, which covered 2017-2019, “Ordinances and city orders were in disarray, not properly reviewed or missing. One example is the city losing its own law. An official city order enacted by the council establishing personnel policies is now lost and could not be produced for our auditors, violating state statute as to official records, and leaving the city at risk of legal exposure if called upon to defend future personnel actions.”
As part of that, Harmon’s staff noted property tax ordinances for several years were enacted referencing a repealed state statute. That led to a recommendation that the city check with the attorney general as to whether the taxing ordinances were properly enacted, given potential tax refund exposure.
The finding that was referred to the AG’s office determined that the city did not consistently record liens for delinquent property taxes from 2015 to 2018.
The report reads: “According to the former mayor, liens were not recorded for delinquent property tax bills under $10, as it was not fiscally feasible. Review of City tax records identified only 18 of the 51 delinquent tax bills in which a lien was not filed were less than the $10 threshold. The reason as to why liens above the $10 threshold were not consistently recorded is unknown. However, it should be noted that an inconsistent process could indicate favoritism or preferential treatment and increases the risk of fraud.”
They also found where a lien recorded by the city for unpaid 2017 property taxes on a tax bill was shown in city records as being paid seven months before the lien was recorded.
The auditor’s office says that according to state law, “Filing a lien when the person ‘knows or should have known’ that the claim was false is a felony offense.”
Due to the potential legal ramifications, that information will be referred to the Kentucky Office of Attorney General.
Other findings include:
--Billing adjustments made on sewer bills by the city were done without review or approval by a secondary supervisor.
--The city’s former clerk received more than $7,500 via a dozen separate payments for payouts of accrued leave balances. Bedford’s personnel policies did not provide for payout of accrued sick time and contained conflicting statements regarding the payout of accrued vacation time.
--Timesheets for city employees were incomplete, including the lack of a signature or identifying the pay period.
--Questionable spending in several areas, including the awarding of $1,175 in bonuses to city employees and contractors, which is a violation of the Kentucky Constitution.
“Like prior examinations and audits issued by our office, we always urge local officials to review the findings and follow the recommendations we provide in order to take corrective action,” Harmon said. “We are encouraged based on the response I received from the city that they have begun the work needed to increase accountability and transparency to those they serve.”
The new mayor, Joe Robinson, responded to the examination by saying, “Your findings in the report are deemed to be accurate and pinpoints areas that have been lacking proper controls and supervisions.”
Robinson said he was already aware of some of the issues in the report, “We are in the process of inserting policies and checks and balances to regain proper control of the city’s finances. I apologize that your team even had to come to our office for this mishap and we will work on the issues that you have brought to our attention.”