Study of City of Salyersville become known Attorney General, HUD

Review by Auditor Mike Harmon’s office details two findings, one on town along with other on neighborhood tourism payment

FRANKFORT, Ky. (August 6, 2020) – Today, Kentucky Auditor Mike Harmon circulated the outcome of an examination by their workplace for the management that is financial functional tasks of tourism funds gotten by the town of Salyersville in Magoffin County. The exam has two findings, which is called towards the workplace of Attorney General, the U.S. Department of Housing and Urban Development, together with neighborhood ethics board for review and action that is possible.

“Our decision to achieve this examination came to exist from issues we received through the public about how exactly Salyersville’s leadership had been business that is conducting tourism dollars that they had received,” said Auditor Harmon. “What our exam discovered were overpayments to a contractor whom additionally is actually the Salyersville mayor’s son, and expenditures through the tourism payment for such things as agreement work for election work and laundering uniforms. We discovered the neighborhood tourism payment would not accept those as well as other expenditures due to the fact board hasn’t met since 2009.”

In a page to Salyersville Mayor James Shepherd, Auditor Harmon detailed the 2 findings produced by auditors:

The town supplied restricted oversight of agreement personnel compensated through tourism funds, and something contractor, who’s additionally the mayor’s son, reported working more or less 224 hours of duplicate time on the behalf of the town and also the Magoffin-Salyersville Housing Authority between July 24, 2017 and June 23, 2018: The Auditor’s page towards the city step-by-step issues regarding real or recognized direction regarding the mayor’s sons by the mayor, which may break the City’s Code of Ethics.

Overview of timesheets for just one for the mayor’s sons reflected 148 instances, and 224 hours, of duplicate time submissions in their two capacities that are different a contract worker for the town and also as Executive Director regarding the Housing Authority. In line with the paperwork and information provided it is ambiguous which entity compensated the contractor/Executive Director for work maybe not performed.

The town expended tourism funds for non-tourism associated purposes without input or approval associated with Salyersville Tourism Commission: City documents suggest that the Commission has not yet met since August 6, 2009; nevertheless tourism funds have actually always been invested by the town, frequently for non-tourism purposes. In an example of 63 expenses through the tourism funds throughout the amount of 1, 2017 through April 30, 2019, 48 did not appear to be tourism related, such as spending on health insurance for city workers, excavation of a county road, and “payday advances” to a city contractor july. Even though many of these 48 expenses appeared as if associated with the operation that is general of city, by state legislation it ought to be the obligation of this payment to oversee the usage tourism funds and work out the dedication of whether or not an operating cost of this town is a legitimate utilization of those funds. Furthermore, tourism funds, like other general public funds, shouldn’t be utilized for individual purposes.

A number of the expenses identified into the Auditor’s page as a Standard City Expenditure or as having an Unclear function include:

Furthermore, the city utilized tourism funds to produce a “payday advance” of $800 to a contract worker whom typically is compensated through the basic investment. Documentation for the advance shows that the worker currently had a balance that is cumulative of700 owed to your town from previous “payday improvements.” Even though the town defines these repayments to your town specialist as “payday advances,” the payments work as a series of interest-free unsecured loans from public funds. Whatever the category, such action by the town is in direct conflict with area 3 associated with the Kentucky Constitution, which calls for that any repayment to a public worker be for consideration of general public solution (easily put, wage and wages for work done).

Without an active commission to make decisions on what tourism funds had been become invested or policies by the town regarding the allowable uses of general public funds, individual expenditures such as the people identified when you look at the test could continue steadily to take place, despite guidance through the state degree.

The Auditor’s letter suggested the city reestablish routine meetings regarding the payment, reappoint users, if required, and transfer oversight of tourism funds into the payment to make sure income tax profits can be used for appropriate purposes.

“This exam comes from the heels of our present information bulletin, which highlighted a deep failing because of the Department for municipality to precisely monitor whether local tourism commissions as well as other https://title-max.com/payday-loans-ri/ purpose that is special entities, just like the Salyersville Tourism Commission, are registered with DLG and getting audits as required for legal reasons,” Auditor Harmon stated. “It further illustrates why actions should be followed to ensure tourism that is local are now being utilized precisely, with accountability and transparency to taxpayers.”

The letter from Auditor Harmon to Mayor Shepherd can be acquired for review regarding the auditor’s website. You may want to review our data that are recent on neighborhood tourism commissions right here.

The Auditor of Public Accounts helps to ensure that general public resources are protected, accurately respected, properly taken into account, and efficiently employed to raise the grade of life of Kentuckians.