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Ramsey Congratulates Constitutional Officers on Re-election

Tennessee Lt. Gov. Ron Ramsey posted the following two statements to his official Facebook page January 14, 2015:

In regard to the re-election of Justin P. Wilson as the Tennessee Comptroller of the Treasury: 

Congratulations to Justin Wilson on his re-election as Comptroller of the Treasury. Tennessee’s strong financial position is due in no small part to the work of Justin Wilson. As Tennessee’s money cop, Justin Wilson keeps watch every day to make sure Tennessee taxpayer dollars are being allocated efficiently and that any waste, fraud and abuse is identified and reported. I am extremely grateful that Tennessee will continue to benefit from his expertise, integrity and commitment to service.

In regard to the re-election of David H. Lillard, Jr., as the Tennessee Treasurer:

Congratulations to David Lillard on his re-election as Tennessee’s Treasurer. Tennessee’s retirement system is fully-funded and consistently ranked among the best in the nation. This isn’t just a matter of luck. It is due to the hard work and management skills of David Lillard. The state of Tennessee is extremely fortunate to have David at the helm at the Department of Treasury. I commend my colleagues for returning yet another resounding vote of confidence in his performance.

Comptroller Investigation Uncovers Multiple Issues in Greene County Utility Districts

Press release from the Tennessee Office of the Comproller; August 18, 2014:

A special investigation by the Tennessee Comptroller of the Treasury has identified a number of problems with the Chuckey Utility District and the Cross Anchor Utility District in Greene County. Until recently these two districts shared a common staff, including upper management.

Investigators made several findings associated with retired general manager Shirley Collins, and former general manager Kandie Jennings. Collins served as general manager for both districts until 2012, at which time the two districts appointed her daughter, Kandie Jennings, general manager.

Comptroller investigators found that Shirley Collins received $25,056 in bonuses that had not been approved by the boards of commissioners. In December 2012, Kandie Jennings directed performance bonuses and longevity bonuses be paid to her mother. Individual board members told investigators they did not approve and were not aware of the bonuses.

Investigators also discovered that former general manager Kandie Jennings spent $2,064 of district funds to purchase an Apple MacBook Pro and accessories for her personal benefit.

There are additional concerns surrounding a $182,334 consulting contract between the Chuckey Utility District and retired general manager Shirley Collins. Investigators found inconsistencies with the authorization, interpretation, and initiation date of the contract.

Comptroller investigators have included a number of recommendations in their final report. These include establishing policies for district expenses and credit card usage. There should also be more oversight of district fuel cards and utility district vehicles.

“Utility Districts are entrusted with large amounts of money,” Comptroller Justin P. Wilson said. “Ratepayers must have confidence that these funds are not being misspent. We are committed to making all forms of government work better.”

To view the investigation online, go to: http://www.comptroller.tn.gov/ia/.

Comptroller: Jackson Assisted Living Facility Misspent Most of Nearly $55K State Grant

Press release from the Tennessee Comptroller of the Treasury; August 6, 2014: 

The administrator of the Jackson Street Faith Home in Jackson, TN properly used just $85 of the $54,650 in state grant funds the home received to assist with the care and services of low income residents. A new investigative report from the Tennessee Comptroller’s Office reveals that much of the grant money was misspent or used for questionable expenses.

The Jackson Street Faith Home is a residential assisted living facility housing approximately eight full-time residents. The home received $54,650 in Quality Enabling Program (QED) funds from the Tennessee Department of Health, Division of Health Care Facilities over a three year period.

The Comptroller’s Office was asked to investigate after the Department of Health notified the Tennessee Bureau of Investigation about the alleged misappropriation of state grant funds. Investigators discovered a cash shortage of at least $38,235.43 as a result of misspending, falsified or no documentation, and documentation submitted outside the grant period. Investigators also identified $16,329.57 in questionable expenses.

The home’s administrator admitted using bad judgment and creating phony invoices that were submitted to the state as documentation. The Comptroller’s findings have been sent to the District Attorney General for the 26th Judicial District for consideration.

Comptroller investigators are recommending the Department of Health take steps to recover the QEP grant funds. The Department should also properly monitor grantee expenditures to provide proper accountability.

“It’s a shame that money intended to care for some of Tennessee’s most vulnerable and disadvantaged citizens was used for an administrator’s personal benefit,” Comptroller Justin P. Wilson said. “We must ensure state grant money is being used appropriately.”

Funding appropriations for the Residential Homes for the Aged Quality Enabling Program were eliminated by the Tennessee General Assembly in 2012. The Jackson Street Faith Home’s license was closed as of January 21, 2014.

To view the investigation online, go to: http://www.comptroller.tn.gov/ia/.

Comptroller: Fmr. Wayne County Education Staff Responsible for $320K Shortage

Press release from the Office of the Tennessee Comptroller of the Treasury; July 29, 2014:

Four former employees of the Wayne County School Department are to blame for a $319,134.58 shortage in school accounts. The Comptroller’s Office, in conjunction with the Tennessee Bureau of Investigation, the Federal Bureau of Investigation, and the Internal Revenue Service began investigating after comptroller auditors discovered discrepancies during their annual audit.

Investigators confirmed the former grants coordinator and three former bookkeepers received $183,474.25 in unauthorized payroll payments and classified them to teacher salary account codes. These payments were in addition to their budgeted salaries.

Investigators also uncovered personal purchases on the School Department’s Wal-Mart credit cards. These purchases included more than $77,176.69 in gift cards and related fees, as well as $58,483.64 in groceries and personal items. The credit cards were assigned to the former General Purpose School Fund bookkeeper.

The investigative report outlines several concerns with the school system’s money-handling practices. Managers should ensure that no employee has complete control over payroll duties, and managers should regularly review credit card purchases.

School leaders indicate they have implemented new checks and balances to prevent a recurrence.

“There is no place for fraud, waste and abuse of taxpayer money in government,” Comptroller Justin P. Wilson said. “While these findings are troubling, I am hopeful that changes are being made to correct the problems we’ve identified, and restore trust in the School Department.”

To view the investigation online, go to: http://www.comptroller.tn.gov/ia/.

Audit: Wayne County Gov’t Riddled with Examples of Management Problems

Press release from the Office of the Comptroller; January 8, 2013:

Wayne County government officials need to take a number of steps to correct poor accounting and bookkeeping practices and to address management issues, an audit by the Comptroller’s office has revealed.

The audit, which was released today, reports 30 findings – that is, areas identified as needing improvement. There were 22 findings in last year’s audit.

The Wayne County Executive’s Office was responsible for 13 of this year’s findings. These findings dealt with an array of issues, including deficiencies in the accounting records for the Wayne County Board of Public Utilities, expenditures being misclassified in accounting records, a cash overdraft in the community development/industrial park fund and loans made without proper documentation.

The Office of the Director of Schools was responsible for eight findings. These included unauthorized payments to employees, questionable spending of state and federal grants and violations of state law in school bus purchases.

“We believe Wayne County has an unacceptably high number of findings and we hope that the government officials there will take steps to address the issues our auditors have identified,” said Comptroller Justin P. Wilson. “Even seemingly small bookkeeping issues can create an environment where fraud, waste or abuse of taxpayer dollars is more likely. We certainly don’t want to see that happen in Wayne County.”

The audit, which was released today, can be found online at http://www.comptroller.tn.gov/la/.

Comptroller: General Services Audit Uncovers Flaws in Contract Procurement Process

Press release from the Office of the Tennessee Comptroller of the Treasury; November 13, 2013:

A report released today by the Comptroller’s office details flaws in the way that the Department of General Services (DGS) handled a contract for facility assessments, master planning and facility management services for the state’s real estate properties.

According to the audit, although DGS did not violate state policy and procedures, department management intentionally procured a contract that was broad in scope so that they could later procure specific services through the contract amendment process. Auditors reported that they could not determine whether some of the amendments were within management’s original contract scope. In addition, auditors reported that in two cases, these amendments created organizational conflicts of interest whereby the contractor could profit from its own recommendations to the state.

Auditors reported in a separate finding that DGS did not adequately document its decision to exclude a vendor when procuring the facilities management services contract.

The audit also highlighted issues with the department’s payment cards and information systems. Auditors found that 20 state agencies representing 78 percent of the state’s cardholders did not submit documentation of their purchases for several months. The entire report can be viewed online at: http://www.comptroller.tn.gov/repository/SA/pa13044.pdf

“The state’s citizens must be able to rely on the Department of General Services’ officials to properly administer the state’s contract procurement process, including those contracts involving the state’s real estate properties,” Comptroller Justin P. Wilson said. “The new commissioner of the department should ensure full transparency and accountability in all procurement activities and should take steps, including disclosure, to mitigate against the risks of any potential conflicts of interest, if those conflicts cannot be avoided in the first place.”

A joint subcommittee of the General Assembly’s Government Operations Committees will hold sunset hearings on the Procurement Commission, the Advisory Council on State Procurement, and the State Protest Committee, which are administratively attached to the department’s Central Procurement Office, on November 13 at 9 a.m. in Room 30 in Legislative Plaza.

Comptroller Seeks Comment on Debt Reporting Form Revisions

Press release from the Office of the Tennessee Comptroller of the Treasury; October 1, 2013:

The Comptroller of the Treasury, through its Office of State and Local Finance, is seeking comment on revisions to a form that a local government is required to complete when it borrows money.

The proposed revisions to the form CT-0253 can be viewed online at: http://www.comptroller.tn.gov/sl/pubdebt.asp

The comment period will last from October 1 through November 15. After all the comments have been reviewed, the Comptroller’s staff may make additional revisions to the form before presenting it at the State Funding Board’s December meeting for approval.

Effective January 1, 2014, a local government has 45 days after the issuance of debt to submit the new version of the form to its legislative body, and file a copy with the Comptroller’s office. Each local government is required to keep a copy of the completed form on file for public review.

The local government must provide information including a description of the debt issue, debt cost, debt type, general descriptions of what the debt will finance, and whether the debt complies with the local government’s written debt management policy. The purpose of the form is to provide clear and concise information to members of the governing or legislative body who authorize and are responsible for debt that has been issued. The proposed revisions are mostly format changes to make it easier for a local government to complete.

“It’s important that governments be very transparent to the public when issuing debt,” Comptroller Justin P. Wilson said. “This form will provide some basic information for people who wish to review debt transactions. We are hoping the comments we receive will help us determine whether any changes need to be made to the form before it is finalized.”

Comments on the proposed revisions to the form should be sent by e-mail to: IGpublic.Finance@cot.tn.gov or by mail to:

Tennessee State Funding Board
17th Floor, James K. Polk Building
505 Deaderick Street
Nashville, TN 37243
Attn: Ann Butterworth

TN Comptroller Report: Gibson City Recorder Stole Funds, Gave Herself Insurance Upgrade

Press release from the Office of the Tennessee Comptroller of the Treasury; September 24, 2013:

The former city recorder in the small West Tennessee town of Gibson stole more than $24,000 and gave herself an unauthorized upgrade to her health insurance, the Comptroller’s Division of Investigations has found. Auditors from the Comptroller’s office worked in cooperation with agents from the Tennessee Bureau of Investigation on the case.

While working as city recorder, Shawnda West withheld at least $24,267 in city funds for her own personal use. Also, she upgraded her insurance coverage to include her dependents, even though the town’s board of mayor and aldermen had only approved coverage for her. The difference in the value of coverage was $1,583.

West was fired from her job with the city and faces criminal charges.

The Division of Investigations released a report on the case today, which is available online at http://www.comptroller.tn.gov/ia/.

The report also highlighted other flaws in Gibson’s money-handling and record-keeping procedures. Specifically, the report notes that West was given sole responsibility for collecting, receipting, recording, depositing and reconciling all city collections – which meant there was no one in a position to oversee her work and possibly detect the theft. Also, collections of city funds weren’t always promptly deposited in the bank and the city did not prepare daily reports on cash collections.

“Fraud, waste or abuse of public money simply cannot be tolerated,” Comptroller Justin P. Wilson said. “Even in small communities, it’s important to set up some checks and balances in money-handling procedures so no single individual is in a position to improperly take money without being detected. I am encouraged that Gibson city officials have indicated that they have taken steps to correct that problem.”

To report suspected cases of fraud, waste or abuse of public funds in Tennessee, call the Comptroller’s toll-free hotline at 1-800-232-5454 or make a report online by visiting http://www.comptroller.tn.gov/shared/safwa.asp.

Haslam Signs Hawkins-Wilson Act, Reforming TN’s Bond Authorization Law

Press release from the Tennessee Senate Republican Caucus; August 27, 2013:

(NASHVILLE, Tenn.) – Legislation enacted by the General Assembly this year ensuring Tennessee’s financial integrity was recognized recently at a ceremonial signing event in Nashville. The bill, sponsored by Senate Finance Committee Chairman Randy McNally (R-Oak Ridge), is named the Hawkins-Wilson Act, in recognition of Tennessee’s 22nd Governor, the late Alvin Hawkins, and Justin Wilson, who is currently serving his third term as the state’s Comptroller.

Hawkins served as Governor from 1881 to 1883. He favored full repayment of the state debt which was in default after the Reconstruction Era building of roads and bridges.

“The Hawkins-Wilson law reforms, clarifies and modifies Tennessee’s bond authorization statute to ensure the financial integrity of the state of Tennessee into the next century,” said Chairman McNally. “It also says the state’s annual debt service shall not exceed 10 percent of the total state revenue allocated to the general fund and the highway fund, setting out a clear, explainable debt service limitation to keep us on the right financial course.”

The new law is a rewrite of the state’s 1937 statute dealing with bond authorization. It also deals with changes in accounting practices to bring state law up to date. The bill was written utilizing best standards and practices nationwide.

“This new law is based on gold standard practices from various AAA states, including Virginia, Maryland and Utah,” added McNally. “It brings us into the 21st century with a renewed commitment to fiscal conservatism that has helped Tennessee become one of the most financially stable states in the nation. I am very pleased this new law has been enacted and that it will carry the names of two of our state’s most influential leaders in sound financial practices.”

Comptroller: More Than $500K in Stolen County Funds Never Recovered

Press release from the Office of TN State Comptroller Justin Wilson; June 11, 2013:

In the 2012 Report of Cash Shortages, auditors found that $563,372.50 of funds stolen from county governments, some dating back several years, had not been recovered. Details about the missing money can be found in the report, which was released today.

The news in the report wasn’t all bad: For the reporting period, auditors reported new thefts of $106,495.27 – down from $213,635.66 the year before. And – thanks to the recovery of $279,817.21 last year – the statewide balance of uncollected funds dropped from $736,694.44 cited in last year’s report to $563,372.50 in this year’s report.

Information about cash shortages is collected from the annual financial reports and special reports for the state’s 89 counties audited by the Comptroller’s Division of Local Government Audit and the six counties audited by private accounting firms.

In addition to a county-by-county breakdown of cash shortages, the report also provides explanations of how the shortages were detected, how the money was stolen, corrective steps taken by counties and legal actions taken against those responsible for the thefts.

“While it is good to see that the number of new thefts was down last year and a substantial amount of money was recovered, there’s absolutely no reason to be complacent about these statistics,” Comptroller Justin P. Wilson said. “It’s important for our local government officials to constantly remain on guard against the potential theft of taxpayer money. That means they need to have good checks and balances – what our auditors refer to as ‘internal controls’ – in their procedures for how money is collected, recorded, deposited and spent. If adequate safeguards aren’t in place, the amount of stolen money identified in future cash shortage reports is likely to rise.”

To view the report online, go to: http://comptroller.tn.gov/repository/CA/2012/2012%20Cash%20Shortage%20Report.pdf