LOUISVILLE, Ky. (WDRB) -- A lack of checks and balances in a small town seemed to be the reoccurring theme Wednesday as WDRB News dug deeper into the story of two Hodgenville officials accused of stealing from the city they lead.

MaDonna Hornback gets the kind of raises people dream of. The Hodgenville city clerk went from $12 an hour in 2007 to $24.75 today.

"When you take this oath of office, you come in to represent the people of your community," Hornback said. "And that's exactly what I am trying to do."

But city council leaders claim they didn't even know about it.

"No I didn't, I'll be honest, until she finally gave us some information about a month or so ago," said Mayor Pro Tem Jim Phelps.

Phelps says the city council doesn't get involved with the day-to-day operation of Hodgenville.

"No, that's a little bit of the complexity of the size town we are," Phelps said. "We have a blanket budget."

That means the Mayor sets all employees' salaries.

"Could we be more thorough?" Phelps asked. "Absolutely. Will we be more thorough? Absolutely. There will be some changes, there's no doubt."

The problems came to light as Mayor Terry Cruse and Clerk Hornback pleaded "not guilty" to charges of abusing public trust and theft. Court records say they used city gas cards to fuel their personal vehicles.

"What has been told is one side of a story," said Cruse. "It will be much different when it is adjudicated and finished."

No matter which way the case goes, some say the issues in Hodgenville expose a serious lack of oversight -- one Kentucky Auditor Adam Edelen says he's seeing throughout the state.

"What we see in small local governments is not adequate segregation of duties," Edelen said. "You see people wearing multiple hats, and when there's a lack of oversight, particularly from a city council or other officials, that's when we see a higher potential for abuse."

Hornback also serves as treasurer, HR, payroll -- and at times -- groundskeeper.

After the indictment, she filed a complaint with the Kentucky Labor Cabinet, claiming she was owed nearly $200,000 in overtime, meaning even more taxpayer money could be coming her way.

"There's never been a law written until there was crime committed," said Phelps. "But now it's happened, so we'll address it and try to put more checks and balances in place."

WDRB looked into the pay for city clerks in surrounding county seats in the Lincoln Trail region. Hornback's year salary of $51,480 is among the top three behind Springfield Clerk Laurie Smith ($55,078) and Elizabethtown Clerk Mary Chaudoin ($54,632). Only two of the seven clerks we spoke with earn overtime pay Bardstown's Barbie Bryant and Brandenburg's Molly Janes.

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