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NewsTracker Transparency and Elections

No Competitive Bids for $34K in Van Buren Co.: State Audit

Van Buren County spent more than $34,000 in spending on food and custodial supplies for the county jail and police cameras for which the county failed to solicit competitive bids, state auditors have found.

State law requires competitive bids for purchases over $2,500, auditors wrote in their report, so that taxpayers get the best deal for the money. The review covered fiscal year 2013.

“The failure to solicit competitive bids could result in the department paying more than the most competitive price,” auditors wrote.

Auditors also cited the lack of a paper trail for $3,000 in spending on undercover drug operations in the sheriff’s department and said it had shared its findings with the district attorney.

The county said in its response to the auditors’ findings that it has procedures to make spending of the drug fund money more accountable.

Last year, auditors found similar oversight problems with the drug control money: financial reports that failed to include $7,370, a lack of documentation of cash handled by undercover officers, and missing signatures on paperwork tracking payments to informants. The paperwork should be signed by the informant, the officer making the payment, and a second officer as a witness to the payment, according to auditors in that 2012 review. Van Buren County’s forms lacked signatures from the informants or a second officer as witness.

In a review of Clay County’s finances, auditors said the county commission had approved spending $23,000 for public works beyond estimated funding.

The county also lacks a formal purchase order system, auditors found.

County officials said financial difficulties prevent them from setting up a purchase order system, and that they are making their current purchasing process work “to the best of our ability.”

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NewsTracker Tax and Budget Transparency and Elections

More than $900K Missing from TN County Coffers Statewide

Taxpayers in Tennessee are owed more than $910,000 that has been stolen or cannot be accounted for, a state Comptroller’s report shows.

That figure represents the amount of money that county offices were still short at the end of fiscal year 2011, after audits revealed the missing money. County offices recovered more than $1.1 million of wayward funds last year.

The report reads like a how-to manual for public malfeasance.

In Davidson County, a worker in the Metro Trustee’s office was involved in a scheme of stealing tax payments and then using future tax payments to cover up the thefts. More than $215,000 was stolen, and as of the end of June 2011 more than $90,000 was still outstanding.

Williamson County has the ignoble distinction of the largest outstanding balance. A bookkeeper in the animal control department, pleaded guilty to theft in November 2010 and was sentenced to eight years’ probation and ordered to pay back the $106,447.17 she had stolen. Auditors found the woman had “manipulated payroll logs, employee timecards and other documents” over five years, the Tennessean reported at the time. But as of last June, no restitution had been paid, the comptroller’s report says.

Unauthorized scrap-metal diversions are popular statewide, a theme picked up on by WPLN.

The comptroller’s office found workers taking the metal from the county trash heap, then reselling it, in six counties: Overton, Cumberland, Gibson, Johnson, Hardin and Cannon. The metal was worth at least $29,827.68, though likely much more because in half the cases auditors could not determine a value for the missing scrap.

The Comptroller report noted:

Section 5-9-401, Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs of the various departments, commissions, institutions, boards, offices and agencies of county governments shall be appropriated to such use by the county legislative bodies.”

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Health Care NewsTracker Tax and Budget

County’s Insurance Opt-Out Criticized

A Coffee County policy on health insurance, which local officials say saves taxpayer money, has come under criticism by state auditors.

Coffee County provides incentive payments to employees who find their own insurance through a spouse’s plan or other means, according to a recently issued audit by the state comptroller’s office. The payments are equal to 67 percent of the premium paid by the county for other employees.

The county defended its incentive payments as legal:

“By offering the opt-out benefit to eligible county employees, the county saves a substantial amount of taxpayer dollars toward health-care premiums. The opt-out benefit will be offered until such time that it is a crime or it is not economically feasible.”

But state auditors pointed to a state attorney general’s opinion, saying that the county does not have the authority to make the cash payments.

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NewsTracker Tax and Budget

Troubles In East Ridge

City officials in East Ridge failed to keep proper financial records, with problems in its handling of cash bonds, credit card expenses and certificates of deposit in the 2009-10 fiscal year, the accounting firm Johnson Hickey Murchison has found.

That’s according to the Chattanooga Times Free Press, which says the accountants’ audit “paints a dire picture of the city’s ledger.”

The audit was released five months after city officials revealed a previously unforeseen $681,999 budget deficit — the largest shortfall for East Ridge in at least two decades.

It also follows a period when councilmen touted the city’s financial strength with the purchases of a crumbling community pool for $120,000 and voting to buy property for $340,000, not including environmental tests, structural inspection, utility repairs and soil examination.

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Education NewsTracker Tax and Budget

Booster Club Boo Boo in Robertson Co.

Robertson County Schools paid more than $100,000 on loans taken out by booster clubs to improve athletic fields, bypassing the county’s usual purchasing and budget process, state auditors found. The booster clubs, instead of the schools administration, were in charge of making payments to vendors.

Because the booster clubs are not subject to audits – the rest of the county government is – “the proper use of these funds could not be determined,” according to an audit by the state Comptroller of Robertson County’s finances in fiscal year 2010.

Schools management said they were not aware they were doing anything wrong but have been assured the funds were used properly for athletics facilities and that they have corrected the problem.

Auditors also faulted the way the schools system accounted for federal stimulus funds — the schools department lumped the funds in with other money instead of accounting for them separately. They also highlighted a weakness in the way the Sanitation Department handles cash. The department set up separate cash drawers for each employee after $200 went missing last July. The department director replaced the money with his personal funds, the audit says.

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NewsTracker

Part-Time Stewart Co. Employee Received Full-Time Benefits

The daughter of Stewart County’s engineer, who was working as a part-time bookkeeper in the Highway Department, received health insurance benefits reserved for full-time employees, a state audit of the county’s finances has found.

Her annual salary totaled $11,600 (including paid leave and holidays she was also not eligible for) in fiscal year 2010, but her health insurance benefits cost county taxpayers more than $6,000. The audit by the state comptroller’s office says she was removed from the county insurance at the end of 2009, although it also noted that the “deficiency” resulted from “management’s failure to correct the finding noted in the prior-year audit report.” No word on whether anyone’s paying the county back the cost of the insurance and paid leave.

Auditors also noted that the schools’ accounting staff does not have the ability to produce financial statements in accordance with generally accepted accounting principles. The schools’ management said they’re getting training on how to produce the reports.

The school system also mismanaged a bid for a special-needs bus, and failed to seek competitive bids for $10,075 in computers, auditors found, though the schools’ management questioned those findings.

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News NewsTracker Tax and Budget Transparency and Elections

Bedford County Contract Bid Questioned

Bedford County Schools improperly awarded a $300,000 computer contract to the highest bidder without adequately documenting its reasons for doing so, state auditors say.

In a letter to the school board, the school system failed to include their reasons for choosing Howard Technology Solutions and rejecting the five lower bidders, auditors reported in an audit of Bedford County finances posted today.

And even though they ended up buying the computers from Howard Technology Solutions, they never executed a formal contract.

Had they gone with the lowest bidder, the school system would have saved more than $27,000, auditors found.

The school system chose Howard because of its service program, according to the school system’s response, included in the audit. That justification was presented to the board, but employees have been directed to follow the auditors’ recommendations going forward, the management response says.

State auditors also faulted the school system for mixing federal stimulus funds in with other funds, and said that at the county sheriff’s office, the commissary needs more checks and balances; at the time of the audit, only one employee was responsible for entering the money into the accounting system, making deposits, reconciling bank statements and disbursing funds.

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NewsTracker Tax and Budget

Pickett County Improperly Issued Road Construction Contract: State Audit

Pickett County officials failed to solicit competing bids for a stone contract, violating state law that requires bids for purchases over $10,000, according to a state audit released earlier this week.

County officials bought $156,000 in crushed stone for a road repair, and according to the audit, the road superintendent said he bought the stone from the quarry closest to the road being fixed. Auditors faulted him for not documenting the transportation costs and warned that the practice of just choosing a vendor could result in taxpayers over-paying for services.

Also worrying was a finding that the general sessions judge has been ordering defendants to contribute to charities of the judge’s choice in addition to paying the usual fines. That’s contrary to a state attorney general’s opinion saying that the judge has no such authority, the auditors noted.

Courts officials also failed to make deposits within three days of collection as required by state law, a persistent problem that auditors said they had noted the year before.

In Rutherford County, auditors say an employee filed false insurance claims more than $14,500, and another employee took $745 from the General Sessions Court for her personal use. The employee filing false claims had signed up two ineligible dependents for the county-provided insurance plan but has since agreed to a restitution arrangement with the county.

Other recent audits can be found on the Comptroller of the Treasury’s website.