Auditor Of Public Accounts
City of Fulton Missing $23,000. Special Examination Requested by City Manager; Referred to Attorney General
Frankfort, KY (May 15, 2007) State Auditor Crit Luallen released a letter detailing a special examination of irregularities involving utility receipts and deposits of the City of Fulton. The special examination identified $23,062.52 in missing money. The discrepancy exists between the amount of money citizens tender for utility deposits and service fees, and the funds that were actually placed in the City Utility Revenue Account. In addition, the investigation discovered over $27,000 in utility transactions that were voided but had insufficient documentation to determine if they were valid.
The State Auditor’s Division of Special Examinations led the investigation after the City Manager referred issues that were uncovered in the 2006 annual financial audit of Fulton City. The City Manager, upon learning of the audit findings, immediately contacted the State Auditor and the Attorney General. Further investigation by law enforcement agencies will be required to determine the whereabouts of the missing money.
“This case is a perfect example of how our system of checks and balances is supposed to work. A local audit was performed, and immediately upon discovering problems the City of Fulton contacted our office, and experts in government examinations were able to determine the extent of Fulton’s losses. I encourage every local government to act quickly when questions of impropriety arise. We will work with law enforcement with the goal of recovering the missing money and prosecuting any wrongdoing. This is why it is so important to have an independent Auditor’s Office,” State Auditor Crit Luallen said.
“The City of Fulton has and will continue to cooperate with KBI and the State Auditor’s Office in every effort to complete the investigation and audit procedure. We believe that every proactive measure has been taken to settle this matter and we are currently implementing procedures to prevent this from ever occurring again,” said Fulton City Manager Kenney Etherton.
The examination period was April 2004 through May 2006. The City of Fulton provides water, sewer, and gas to its citizens. Documentation reviewed during the examination included City utility records such as cash receipt books, daily cashier reports, daily cash and receipts reports, monthly bank statements, and a sample of reconciliations for the utility payments. In addition, seven internal control comments and 18 recommendations were offered to the City of Fulton.
RADIO ACTUALITY AVAILABLE WITH REPORT at www.auditor.ky.gov
Luallen Actuality: “THIS CASE IS A PERFECT EXAMPLE OF HOW OUR SYSTEM OF CHECKS AND BALANCES IS SUPPOSED TO WORK. I ENCOURAGE EVERY LOCAL GOVERNMENT TO ACT QUICKLY WHEN QUESTIONS OF IMPROPRIETY ARISE.”
STATEMENT BY FULTON CITY MANAGER
May 15, 2007
FOR IMMEDIATE RELEASE:
During the City of Fulton’s annual audit in September 2006 it was reported to City Manager Kenney Etherton that several receipts were missing. Discussing the issue with our Corporate Attorney a decision was made to contact the Commonwealth Attorney to request an investigation into the matter.
In October 2006 a KBI Agent was assigned to the case and the State Auditor’s office was notified. On November 2, 2006 a meeting was held at Fulton City Commission Room with members of the State Auditors’ staff and various records were furnished to the auditors. After the meeting the auditors took the records back with them to Frankfort for further investigation into the matter and to audit our records.
The City of Fulton has and will continue to cooperate with KBI and the State Auditor’s Office in every effort to complete the investigation and audit procedure. We believe that every proactive measure has been taken to settle this matter and we are currently implementing procedures to prevent this from ever occurring again.
We fully intend to continue our cooperative efforts with KBI during their on-going investigation of this matter.
Kenney M. Etherton
Fulton City Manager