According to the recently released 2021 audit by the State Board of Accounts, Marshall County Sheriff Matt Hassel failed to properly implement internal controls over the processing and safeguarding of the Sheriff’s Inmate Trust Account funds records and failed to use a state-approved ledger for the Jail Commissary Ledger Funds.
Indiana Code requires the County Sheriff of each county that operates a county jail to hold, in trust separately for each inmate, any money received from that inmate or from another person on behalf of that inmate. This statute specifically requires the County Sheriff to maintain a record of each trust fund’s receipts and disbursements.
The Marshall County Sheriff’s Inmate Trust Accounts are maintained via an electronic software system. The Marshall County Sheriff’s Department stated the electronic software system had backup procedures in place to secure the data. However, the County failed to test the backup files in 2020 to verify that critical data could be restored from a backup file and to ensure the restoration of information in a timely manner.
The Sheriff’s Inmate Trust Account software crashed, and all historical data was lost prior to August 31, 2020, and had not been restored as of July 28, 2022. Sheriff Hassel was unable to provide details or history for inmates who were residents prior to August 31, 2020. It was indicated that neither electronic backup files nor manual hard copy documentation of the Sheriff’s Inmate Trust Account balances were maintained for the period January 1, 2020, to August 31, 2020.
Prior to adjustments being recorded in the trust ledger after the crash, the Sheriff’s Inmate Trust Account fund bank account exceeded the detail by $85,258. The audit report stated, “An employee, who worked for the software company, estimated $16,024 in expenses from inmate trust accounts by prorating various non-inmate expense accounts based on a percentage of total funds prior to the crash, such as indigent haircuts, commissary, medical, extra meal cards, property damage, and miscellaneous supplies. They then deposited the balance of the difference, $69,234, into a retained earnings account.” Only documented actual expenses can be removed from an inmate’s trust account.
The audit report concluded that the Marshall County Sheriff has not properly reconciled the inmate trust account since June 2020. As of December 31, 2021, the Sheriff’s Inmate Trust Account bank and ledger balance exceeded the detailed inmate trust ledger by $69,234, the amount posted to retained earnings.
The Sheriff received a second notation in the state audit pertaining to the Jail Commissary Ledger.
Indiana Code applies to any county that has a jail commissary that sells merchandise to inmates. This statute specifically requires the County Sheriff to maintain a record of the jail commissary fund’s receipts and disbursements in a form prescribed by the Indiana State Board of Accounts (SBOA).
A Ledger of Receipts, Disbursements, and Balances Commissary Fund, Form 205, has been prescribed by the SBOA. The Marshall County Sheriff’s Department used a commercially purchased software program (QuickBooks) to prepare spreadsheets to serve as the Jail Commissary ledger. However, QuickBooks does not retain an audit trail of the original transaction when a receipt or check is voided.
Both issues reported in the 2021 Indiana State Board of Accounts audit completed this year were also noted in the 2020 audit.