Crit Luallen, Kentucky's Auditor of Public Accounts, today released the annual audit of the Commonwealth of Kentucky for Fiscal Year ending June 30, 2004. Known as SSWAK, the Statewide Single Audit of Kentucky includes test of state and federal compliance with laws, regulations, contracts, and grants. In addition to compliance testing, the Commonwealth's internal control over financial reporting and compliance is considered and tested.
The audit contained 49 reportable findings (reportable conditions are significant deficiencies in the design or operation of internal controls), an increase of 9 findings from the prior year. Seventeen (17) of the findings related to financial statement weaknesses in internal control and / or compliance; 32 related to federal program weaknesses in internal control and/or compliance. Of the 49 reportable findings, the audit considered two of them to be material (material weaknesses are reportable conditions that may increase the risk of error or misstatement by a material amount), which led to a qualified opinion on compliance for two programs administered by the Department of Military Affairs.
Findings and recommendations of note include the use of retail store credit cards without proper oversight which led to fraud, a lack of program review in the Supplementary Medical Insurance program which led to eligible registrants being removed and ineligible people having premiums paid, the Department of Military Affairs failure to develop an internal control system for the State Domestic Preparedness Equipment Assistance Program, and a need for improvements in the change order process within the Transportation Cabinet.
"This 224 page document is a blueprint to improve the way the Government of Kentucky does business. It is very important that an independent watch dog for the taxpayer's money exist in order to assure that Kentucky's money is being spent as efficiently and effectively as possible," Ms. Luallen said.
The audit noted $646,275 in questioned costs, of which $593,710 was noted in the current fiscal year. Questioned costs are expenditures made on behalf of the federal program that are not allowable expenditures based on various criteria established by the Office of Management and Budget and various laws and regulations.
Congress, in the Single Audit Act of 1984, and subsequent amendments, authorizes this audit. The act requires that states audit financial statements, and their compliance with internal controls, regarding federal funds received by the Commonwealth. The Statewide Single Audit of Kentucky is one of the Office of Auditor of Public Accounts' annual statutory mandates, and is submitted to the federal government. Work began on SSWAK in April 2004. This report is the product of 43 auditors and over 35,000 hours of work.
The following auditors were involved in the Statewide Single Audit of Kentucky: Doug Allen, Kenny Blackwell, Amy Bishop, Veronica Bradley, Tom Crouch, John Cubine, Jennifer Curtis, Charlene Daniels, William DeRossett, Farrah Duvall, Amy Fisher, Stephen Fuller, Kelly Glines, Gregory Giesler, Jennifer Harper, Mary Hudson, Tony Hutchins, Jason Johnson, Candy Kalisz, Brent King, Liz Lowe, Jenny Luscher, Brian Lykins, Scott McKenzie, Pete Patel, David Pitts, Robert Poynter, Lori Riddle, Sandra Rudic, Linda Sagraves, Otis Singleton, Brianne Skidmore, Amy Small, Brenda Starr, John Stout, Mei-Lin Su, Michelle Sutton, Cheryl Vaughn, Scott Vogt, Tiffany Welch, Alice Wilson, Lleslie Wilson, and Valerie Young.