Auditor Of Public Accounts
Audit: Kenlake Park employee steals almost $75,000
State Auditor Crit Luallen today released an audit of the financial records of Kenlake State Resort Park, which documents the theft of almost $75,000 by a Kenlake employee over more than a two-year period.
The audit also recommends ways the Kentucky Department of Parks can strengthen its financial oversight in its parks statewide.
The former employee, Amy Hall, 35, has pleaded guilty to theft and will be sentenced today in Marshall County Circuit Court, according to court records. Luallen’s office collaborated with the Kentucky State Police in a criminal investigation into Hall’s activities and referred a copy of the audit to KSP for its case against Hall.
Kenlake officials became aware of the theft earlier this year after two Kenlake employees were “highly suspicious that fraud was being committed,” causing Parks to launch its own investigation, according to the audit. Once Parks’ auditors found missing funds, the agency contacted KSP.
Parks officials and KSP then asked the Auditor’s Office to thoroughly examine the business reports at Kenlake to determine the amount of the theft and to suggest ways to improve financial oversight.
Auditors reviewed daily business records at Kenlake, which is located in Marshall County, from Sept. 1, 2005 until Feb. 29, 2008 and found that $74,803 was misappropriated during this timeframe.
Auditors noted because there are weak financial controls at Kenlake, the amount taken “may be greater.” Auditors suggest several recommendations on how Parks can strengthen its controls over its business operations statewide.
The audit documents how Hall, who handled all financial matters, was able to take cash from the daily bank deposits and replace the cash with checks received in the mail – a process auditors refer to as a “lapping scheme.”
“We were glad to assist Parks with examining this matter in more detail and to suggest ways to strengthen the agency’s controls over its business operations statewide in hopes of preventing this type of fraud and abuse in the future,” Luallen said.
The audit mentions that Parks maintains an internal auditing staff, which currently does not perform any internal audits at individual state parks. Kenlake’s last internal audit was performed in the late 1980s or early 1990s, according to the audit.
“We understand that the department is trying to implement internal audits in various areas; however, the current budget and personnel situation makes this a difficult task. Nonetheless, audits would greatly benefit the parks and significantly reduce the risk of loss or theft, as well as point out areas where improvements could be made,” according to the audit.
Additionally, auditors found that some activities at Kenlake appeared to be bartered for and not accurately reflected in the park’s accounting records. Auditors use the example of expenses for radio advertisements that were exchanged for the use of meeting rooms at the park.
In the audit, Parks says it “intends to implement the recommendations set forth in the report system-wide and that some of the recommendations are already in place.”
“It should further be noted that appropriate disciplinary actions have been taken with employees involved in the scope of the Kenlake audit, including the resignation and subsequent criminal indictment of the perpetrator of the identified theft of funds,” according to the agency response.