The 2017 audit of Caldwell County Sheriff Stan Hudson was released by State Auditor Mike Harmon on Monday.

According to Auditor Harmon, the Caldwell County Sheriff’s Office lacks adequate segregation of duties, which is a repeat finding included in the prior year’s audit report. The release stated that the Caldwell County Sheriff’s Office does not have a properly designed segregation of duties as the bookkeeper performs all accounting functions of the office. According to Sheriff Hudson, this condition is a result of a limited budget, which restricts the number of employees that can be hired or duties delegated to.

Auditor Harmon says the lack of segregation of duties, or sufficient oversight, could result in the undetected misappropriation of assets and inaccurate financial reporting to external agencies, such as the Department for Local Government.

To help offset this lack of segregation of duties, the sheriff has implemented compensating controls including management oversight. However, these controls were not in place for most of the year. Auditor Harmon suggested that the sheriff should separate the duties involved in receiving cash, writing checks, posting to the ledgers, preparing bank reconciliations, and comparing financial reports to documentation. If this is not feasible, Auditor Harmon suggests cross-checking procedures should be implemented and documented by the individual performing the procedure.

Sheriff Hudson replied to the release saying the agency adopted new procedures in September of 2017 after recommendation of the auditor.

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