LOUISVILLE, Ky (WDRB) — A $3.4 million accounting discrepancy inside Floyd County’s books is finally being resolved after years of errors.
At first glance, an extra $3.4 million in county accounts might sound like good news. County officials say it’s not that simple.
The issue dates back years and was discovered while former Floyd County Auditor Scott Clark was still in office. Clark resigned in September 2019 amid concerns from state officials and county commissioners about his management of the auditor's office. At the time, Clark faced criticism over alleged attendance issues and accounting errors during his time in office.
Current Floyd County Auditor Diana Topping, who took office nearly four years ago, inherited what she described as severely unbalanced financial records.
"Well, it accumulates. If you start with a wrong number, you're going to continue to build a wrong number," Topping said.
According to Topping, the $3.4 million discrepancy was not the result of stolen funds, but rather years of undocumented accounting entries that inflated the county's reported balances. "Now that reconciliation clerk was terminated and replaced the same year that the issue was discovered" Topping said, "So, that person no longer works for the county."
"It's 3.4 [million], and it's an accumulated 3.4 multiple undocumented outages that totaled to that overall amount over multiple accounts," she explained.
County officials say financial entries were improperly entered as early as 2015, creating balances that did not match the county's actual bank accounts.
To determine the extent of the problem, Floyd County hired an outside auditing firm to review every transaction connected to the discrepancy. The audit found that all but approximately $300,000 of the $3.4 million could be accounted for.
"The cash book overstates what we have in the bank, which is why I'm very clear about the fact that money isn't missing. Money wasn't taken," Topping said.
County Commissioner Danny Short said if investigators uncover evidence of criminal wrongdoing, county leaders would support further action.
"If someone did something illegal or it was found to have been that, there's nobody on either of those boards that would have a problem with bringing charges to somebody or reporting it to the state," Short said.
The accounting problems were first identified in 2018 while Clark was still serving as auditor. When asked at the time about concerns regarding his office, Clark declined to comment.
More recently, WDRB again reached out to Clark regarding the bookkeeping issues.
When asked whether he was aware there had been oversight problems during his tenure, Clark responded, "I'm not going to discuss this," before ending the conversation.
Topping says the county's books are now balanced, but the final step requires approval from both the Floyd County Council and County Commissioners to formally write off the remaining discrepancy and officially clear the books.
County leaders emphasize no money is missing, saying the issue stems from accounting errors rather than theft.
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