By Jim Hannah
The Cincinnati Enquirer

FALMOUTH - Pendleton is in jeopardy of losing $1.5 million in federal grants because the Northern Kentucky county has not been audited for nearly two years.

"Failure to comply with these federal regulations jeopardizes your community's ability to receive any further funding on this project or any other project," wrote Ventra Mapp of the Department of Local Government in a June 10 letter to county officials.

The letter concludes by saying the county could be requested to return all block grant money if the audit is not satisfactorily completed in a timely manner.

Recipients of federal block grants are required to have yearly audits. Pendleton has traditionally left the task of auditing its books to the state auditor's office.

State Auditor Ed Hatchett contends it isn't ultimately his job to audit the county. County officials could hire a private auditor to do that task.

But Bertram thinks it is the state auditor's responsibility. He points out that Hatchett's office would have to give the county a special exemption to allow a private auditor to examine the books. And law requires the state auditor to conduct the audit himself at least every fourth year.

Pendleton Judge-executive Henry Bertram said his rural county has been placed in a difficult situation by two state agencies.

The state agency that administers the federal block grants wants an audit by July 1, while the state agency in charge of auditing public funds says it is just too backed up to get it completed by then.

Boone County Administrator Jim Parsons said the state auditor just doesn't have enough resources to get to each of the 120 Kentucky counties every year. That's why Boone County has opted for years to hire a private auditing firm to examine its books.

Parsons said Boone County has learned that private auditors get the work done in a more timely manner and have more time to instruct the county on proper accounting practices than the state auditor's office.

Bertram said even if Pendleton County hired a private auditing firm today, there is not enough time to meet the July 1 deadline.

Bertram said losing the federal block grant would also jeopardize an additional $3 million lined up from other funding sources for various improvements and economic development.

E-mail jhannah@enquirer.com