Wed October 3, 2012
State Audit Finds Poor Documentation, Troubling Practices in Jefferson County Clerk’s Office
An audit of Jefferson County Clerk Bobbie Holsclaw's office shows poor record keeping of charitable funds and others questionable administrative practices regarding a non-profit and employee bonuses.
The report was conducted by State Auditor Adam Edelen, and it scolds the clerk for failing to properly account for funds that her office raised for charities such as the Crusade for Children and USA Cares Inc.
Among its findings were that Holsclaw paid $99,200 in Christmas bonuses to employees last year. According to the clerk's office the $400 per employee bonus was an incentive for good work, but Edelen's office points out that the practice is prohibited by the Kentucky Constitution and should be stopped.
Auditor spokeswoman Stephanie Steitzer says the report is not alleging any criminal activity, but does contain several recommendations to help save the taxpayer’s money.
"We are pointing out that there are some areas of concern where she can make—we make recommendations for improvement—again, to limit the risk to taxpayers and to herself," she says.
The audit also showed Holsclaw ran a non-profit—dubbed Voter Outreach Inc.— out of her office, and found several issues and discrepancies as a result. Edelen recommends she separate the voter program from her official capacity.
There was another issue regarding an employee charitable fund that raised money from employee donations, "Support Our Troops" yard signs and donations for the Crusade for Children charity. According to Edelen's report, the fund had very little documentation and no bank statements from 2010.
"Because of poor recordkeeping, there was difficulty determining that restricted donations were remitted intact to the charities," the report says. "There is an increased risk of not properly accounting for public funds of the clerk’s office due to the additional cash and generic receipt books used to administer these charitable contributions."
In response, Holsclaw’s office denies any public funds were misused and challenged most of the findings, adding that previous audits had not found accounting problems.
A county clerk spokesperson could not be reached for comment on this story.
Steitzer says the report was conducted to benefit taxpayers and give the clerk's office guidance, but that Holsclaw wasn’t as helpful as they expected.
"I’m not sure that I would characterize Ms. Holsclaw’s office as wholly cooperative in this process," she says. "I would say there are concerns about the way audit staff was treated. We always ask and hope that clerk's and sheriff's encourage their staff to cooperate with us, because we are trying to provide a service that also helps them."
The report is being referred to the Louisville Metro Ethics Commission and Jefferson County Attorney’s office to determine if a further investigation is warranted.