Saturday, May 8, 2004

State worker didn't bother to process checks for $480K

By Joe Biesk
The Associated Press

FRANKFORT - Two Department of Corrections employees have resigned after state officials found about $480,000 in uncashed checks stashed in one of the workers' desk drawers, Lt. Gov. Steve Pence said Friday.

During four years, an employee at Kentucky Correctional Industries failed to deposit about 250 checks, Pence said. They were found during a routine investigation, Pence said.

"Clearly this was money that should have been deposited," Pence said. "We obviously had a lack of control and a lack of supervision."

State officials were trying to find a particular check when they discovered the uncashed ones last week, Pence said. Some dated to 2000, and at least one was for more than $40,000, he said.

Officials also found letters from some of the check-writers inquiring about their checks, he said.

So far, officials have deposited about $300,000 into state accounts. However, some had expired and the state is seeking to recoup that money, Pence said.

It's possible the state may not be able to retrieve all the money, he said. Some businesses may have gone out of business, while other amounts may not be worth collecting, Pence said.

"We hope to get all of the taxpayers' money back," he said.

The employees' names were not disclosed.

The employee and the director of the employee's department have both resigned, Pence said. A third employee has been reassigned, he said.

State officials have referred the matter to the Kentucky State Police for further investigation. Criminal charges have not been filed.

Gov. Ernie Fletcher said he thought the matter was "probably more a case of neglect."

Pence, who is secretary of the Justice and Public Safety Cabinet, also asked the state auditor on Thursday to review Kentucky Correctional Industries' business procedures.

State Auditor Crit Luallen issued a statement saying her office would conduct a "full financial audit" of KCI.

"We will not only review specific past practices, but will be giving our advice on controls and procedures," Luallen said in the release.

State inmates work through KCI to make and sell products and services.

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