Providing accountability and transparency while saving taxpayers money

In 2016, when I was sworn in as Kentucky’s 47th Auditor of Public Accounts, I stated that the role of our office is to make sure government is efficient, effective, and ethical.  Each day, our auditors accomplish that through the work they do in holding state and local government accountable to the taxpayers of Kentucky.

But, our office also understands that public funds are tight in many areas of the Commonwealth even before the current pandemic struck our nation.  Based on that reality, we always search out ways to carry out our motto of “Follow the Data” while at the same time doing so in a resourceful, responsible fashion.

During the 2018 legislation session, we worked with Senator Stan Humphries on Senate Bill 144 which allows county sheriffs and county clerks with prior clean audits to be eligible for an agreed-upon procedures engagement, or AUP. Our office supported SB 144 after a review of 2015 audits found that half of all Kentucky sheriffs, and two-thirds of county clerks had clean audits.

Originally, we estimated AUPs would cost 25 to 50 percent less than a full financial statement audit. Recently, I announced the AUP savings for county sheriffs and clerks for 2018, which was the first full year of the new law.

What our analysis found is for the 19 county sheriffs that received an AUP, they saw on average a 70% decrease in their audit costs.  That equates to a total reduction in audit billing for the 19 county sheriffs of more than $144,000.

For the 45 county clerks who got an AUP instead of a full financial statement audit during 2018, their billing amount was 65% less on average than for the audits they received the year before.  Overall, that equals a total dollar savings amount of around $286,000 for the 45 clerks.

The benefit of AUPs is that in addition to helping counties save public dollars because of the cost reduction, it also serves as an incentive for sheriffs and clerks who may have just one finding such as a lack of segregation of duties to correct that issue.  In addition, it allows our office to focus more time on higher-risk areas like the many special examinations we conduct.  Examples of our past special examinations include the Kentucky Wired project and the University of Louisville Foundation.

While agreed-upon procedures engagements are not the same as full financial statement audits, they still provide local officials and those they serve accountability and transparency on how they are spending their local tax dollars.

The responsibility of making sure tax dollars have been spent properly is a duty our office takes seriously, but the ability for us to work with our counties to seek out ways to help save money is just as important.  Both duties are key to our shared goal of providing you good government.

Mike Harmon is Auditor of Public Accounts for the Commonwealth of Kentucky.