FRANKFORT, Ky. — State Auditor Mike Harmon’s office has completed its annual audit of the Commonwealth of Kentucky’s Comprehensive Annual Financial Report, or CAFR, and found some serious issues with the Unemployment Insurance Fund.
Specifically, Harmon’s office issued a “qualified opinion” on the Unemployment Insurance, or UI Fund, also known as the Unemployment Compensation Fund, because of the UI internal control environment and the unknown amount owed to those who filed for unemployment benefits during the Fiscal Year 2020.
The CAFR is required under state law, which directs the Finance and Administration Cabinet to submit a complete report of the financial transactions of the preceding year and of the financial condition of the state at the end of the fiscal year. The State Auditor’s office role is to express an opinion as to whether these financial statements are free of material misstatements based on our audit.
An unmodified opinion commonly referred to as a “clean audit” expresses the auditor’s opinion that the financial statements are presented fairly in all material respects. A qualified opinion is an auditor’s opinion that the financials are fairly presented, with the exception of a specified area, in this case, the Business Type Activities and the Unemployment Compensation Fund. All other units of the state received unmodified audit opinions.