Recommendations by the accounting firm hired by the Board of Supervisors to audit the fee practices of the circuit clerk’s office should be followed until a continuing investigation is completed, a spokesman for the state auditor said Thursday.

“Just because he says that’s the way it should be done — it’s his opinion,” Warren County Circuit Clerk Shelly Ashley-Palmertree said after State Auditor Stacey Pickering’s office posted a 2010 audit this week. The state office said it was continuing its probe into about $300,000 the accounting firm of Bridgers and Company says Ashley-Palmertree should pay Warren County.

“I disagree with it. It’s not cut and dried. The next auditor that comes in could tell me to do things differently,” the eight-year clerk said.

The investigation began after Pickering took office in 2008, said Lisa Shoemaker, communications director for Pickering, but items in question go back at least to 2006, total $300,000 or more and have yet to be resolved.

“The (auditor’s) findings come with recommendations,” Shoemaker said. “That is her instruction, and she’s been receiving these instructions since 2006. We would tell that to a clerk in any county.”

Ashley-Palmertree said the recommendations form the foundation of the dispute.

Bridgers and Company, a Vicksburg CPA firm, has conducted the county’s annual audit each year since fiscal 2005-2006. Before that it was done by Buckner, Buckner and Bridgers for the 2004 and 2005 fiscal years. Previously the Office of the State Auditor had conducted its own audits.

The Warren County Circuit Clerk’s Office operates on fees collected and is not funded by the county budget, but the clerk must file financial records each year with the state auditor’s office and its books are examined by the independent CPAs.

David I. Bridgers Jr. said his firm’s policy is to not comment on audits but that findings and recommendations are a matter of public record.

Audits have noted exceptions to Ashley-Palmertree’s accounting methods every year since the fiscal year 2004 report, filed Oct. 28, 2005, with no resolution of the disputes.

“I’ve been working with the state auditor’s department for six years now,” said Ashley-Palmertree, who was elected in 2003 and Tuesday was nominated by the Democratic Party to seek a third term. She said she has pushed for the disputes to be resolved and fully cooperated with investigators.

“You do things a certain way. When someone comes in and tells you to change, then you change,” she said. “They (the state auditor’s office) haven’t done that.”

Shoemaker said she was aware of “findings” in the audits but would not discuss the investigation.

“I can’t speak to whether she owes the money,” she said.

In Warren County, the circuit clerk’s office is operated like a business, with the clerk collecting fees for various services — such as lawsuit filing fees, marriage fees, statutory payments from the county based on the number of days court is in session — and paying expenses such as payroll out of those fees. Ashley-Palmertree files self-employed Internal Revenue Service tax forms each year to report her income and expenses, and said the IRS has never disallowed her deductions.

By state law, a circuit clerk’s salary is capped at $90,000, with certain exceptions.

Some audit issues are amounts the Bridgers and Company audits stated “the circuit clerk has failed to pay” to the county. They represent income over the $90,000 cap and do not fall under the allowed exemptions, the audits say.

The amounts — $120,160 for 2010, $77,282 for 2009, $13,036 for 2008, $47,969 for 2007 and $35,166 for 2006 — are noted on the Circuit Clerk’s Fee Report provided to the Office of the State Auditor.

Other points at issue are expenses paid with “no supporting documentation,” the audit states, with a recommendation that, “The circuit clerk should reimburse the county” for those particular fees.

Ashley-Palmertree said some of those fees had been paid to her father, former Circuit Clerk Larry Ashley, and retired deputy clerk Johnnie Williams, both of whom she hires to serve as court clerks during times when she cannot be in the courtroom.

Among other duties, the circuit clerk or her deputy has the responsibility to be present in circuit court, youth court and county court every time they are in session. All three sometimes are in session at the same time, she said.

“Any staff I have, I pay,” Ashley-Palmertree said. “The county does not give me a budget to pay my people.”

In addition to the part-timers, the office employs six people full time, she said. One has been there 23 years, one 16, three 10 or more and one less than two years. Salaries, matching retirement and Social Security and other payments are expenses of the office, though employees pay their own health insurance premiums.

Larry Ashley’s employment alone is part of the dispute. State law says payments to a “first-degree” blood relative should fall within the clerk’s $90,000 cap unless the relative was employed by the office when the law was changed in 1999.

Larry Ashley was circuit clerk from 1987 until 2003.

In the end, Ashley-Palmertree and Shoemaker say, the dispute might have to be decided by the courts.

Shoemaker said investigations generally either are closed because they are found to be without merit or the office issues a demand for money to be repaid to the county, which can result in a civil suit.

If criminal activity is suspected, the state auditor works with the district attorney to secure a grand jury indictment and take a case to trial, she said.

The state auditor’s office employs 15 investigators, each with a caseload of 10 to 15 cases statewide, some valued at millions of dollars, Shoemaker said.

“There is no set timetable for an investigation,” she said. “It depends on the workload and complexity of the case.”

Ashley-Palmertree said the disputes arise from the state’s salary cap rules that lend themselves to different interpretations and probably need to be “tweaked” by the Legislature.

“There probably have been errors made — on everyone’s part, the auditor, the state auditor’s office and on my part,” she said. “That’s where we need to come to a resolution.”

Ashley-Palmertree, who defeated auto sales manager Preston Balthrop in the Democratic primary Tuesday, faces challenges from Republican nominee David Sharp and independents Jan Hyland Daigre and Robert Terry in the general election on Nov. 8.