The Bourbon County clerk's accounts payable account was overdrawn Wednesday, Treasurer Jennifer Hawkins told county commissioners in an email obtained by The Monitor through a Kansas Open Records Act request. Hawkins wrote that the county had been charged $262 in overdraft fees.
Hawkins wrote that the account was overdrawn "again" and that the overdraft resulted from "entities pulling funds from the account but the invoices not being vouchered and sent through accounts payable." She called the situation unacceptable and said it needs to be fixed as soon as possible.
The email, sent at 8:34 a.m. Oct. 28, went to all five commissioners. Copies went to the county clerk's office, the county's attorney, commission executive assistant Laura Krom and Emily Franks of Jarred, Gilmore & Phillips, a Chanute based accounting firm.
Hawkins attached a bank reconciliation report for the account, which she wrote shows "how the situation is snowballing." The four-page report, titled "Items Not In Bank Account" and run Oct. 27 for the Sept. 30 bank statement, lists 87 items.
Those items total a net $445,695.40. Most of that amount comes from entries dated August and September, including entries labeled as payroll, Blue Cross Blue Shield, KPERS and county transfers.
The report also lists 21 entries labeled as Kansas Public Employees Retirement System items and 12 labeled as health savings account items. Seven entries date to 2024 and 2025.
Franks replied to the group that afternoon.
"I just want to make this clear that the items not in bank is a very big problem which needs to be addressed prior to audit," Franks wrote.
Jarred, Gilmore & Phillips audited the county's 2025 finances. In its report, dated April 3, the firm found that the county's financial statement presented its cash balances, receipts and expenditures fairly, in all material respects, under the state's accounting rules for local governments.
The audit did not evaluate the effectiveness of the county's internal controls. In a separate letter to commissioners, however, the firm identified three material weaknesses in those controls.
One involved the county's cash reconciliation, where auditors found deposits that had been outstanding for more than 90 days, some for more than a year.
The auditors wrote that carrying stale deposits "overstates the County's unencumbered cash balance and could lead management to make decisions based on incorrect information." The other weaknesses involved checks the bank honored without required signatures and credit card charges lacking supporting documentation.
Krom also replied to the group. She wrote that after several discussions with Blue Cross Blue Shield of Kansas, she was able to get the company's payment processing schedule changed beginning with the December payment.
Krom wrote that she will now receive the bill before it is due, allowing the payment to be drawn closer to the actual due date on the first of each month. Entries labeled as Blue Cross Blue Shield are among the largest on the reconciliation report.
The emails followed Hawkins' update to the County Commission at its Oct. 26 meeting. She told commissioners then that seven county payrolls processed since Aug. 21 had not been posted to the county's general ledger.
Hawkins said that prevents her from giving departments accurate budget reports as the year nears its end. She said all payrolls from Jan. 1 through Aug. 21 have been reconciled and posted.
Hawkins also said residents had asked her why she was no longer doing payroll entries.
"I've actually never done any payroll entries," Hawkins said. "What I do is I reconcile what the clerk processes."
She said she transfers money from the main county account to the clerk's accounts payable account to cover each payroll. She told commissioners the list of reconciliation variances had grown to four pages, including KPERS, health savings account and garnishment items.
"I'm reconciling both bank accounts, there needs to be a lot of checks and balances," Hawkins said. "I can't do everything."
Hawkins said former County Clerk Susan Walker had emailed about the reconciliation errors before leaving office and provided a list of outstanding issues. Walker resigned effective Aug. 31, and Ann Clarkson was appointed clerk in September.
Commission Chairman Gregg Motley said at the Oct. 19 meeting that the county's payroll process had produced incorrect accounting entries for 10 months. Commissioners that day approved software to automatically transfer payroll data from PayEntry, the county's outside payroll company, into its CIC accounting software.
"We can't continue," Motley said Oct. 19. "We can't wait until the audit where we're going to get slaughtered."
Motley told The Monitor Thursday that the county’s next audit will probably take place in April.
Motley said Oct. 26 the software will not fix existing problems. He said he sent Baker Tilly a list of all payrolls with incorrect coding or balancing issues and asked for a quote to correct them, and that the county is waiting on that quote.
Commissioner Mika Milburn-Kee asked whether that list covered only the health savings account issues. Motley said it includes every payroll issue, deposit, withdrawal, debit and credit.
Hawkins said she would email her most recent variance list to all commissioners.
"I'll email it to all of you so that you know exactly where we're sitting and why I'm here again saying this is a major issue," Hawkins said.
