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Finney Drafts Legislation With ‘Standard of Ethics’ for State Contracts

Press release from TN Senate Democratic Caucus Chairman Lowe Finney; November 20, 2013:

NASHVILLE – State Sen. Lowe Finney has drafted legislation that will stop any state agency from entering a contract that allows a contractor to profit from its own recommendations.

“This bill stops companies from profiting from their own recommendations, as we’ve seen in the state’s building management contracts,” Sen. Finney said. “This bill sets a standard of ethics and protects taxpayers.”

The bill follows an audit by the state comptroller’s office that found flaws in the way the Department of General Services handled its contract with Jones Lang LaSalle for facility assessments, master planning and facility management services.

Auditors found that in two cases, the state’s contract with that company created organizational conflicts of interest where the contractor could profit from its own recommendations to the state.

The standards set forth in the legislation would put Tennessee in line with federal contract standards.

“The ideas of saving taxpayer dollars and having a standard of ethics on conflicts of interest are not mutually exclusive,” Sen. Finney said.

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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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NewsTracker

$620K Missing from County Coffers

More than $620,000 was missing from county government coffers as of the most recent check by the comptroller’s office, according to a report issued by the office today.

The cash shortages, originally amounting to $1.6 million, date back to 1996-97 and were spread over three dozen counties, the report says. Included in the report are details of missing money in Monroe, Hickman and Morgan counties, which we’ve blogged on here before.

More coverage: Knoxville News-Sentinel

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NewsTracker Tax and Budget

Competitive Bidding Process Skirted by Benton Commission

Benton County circumvented the competitive bidding process when it entered into a $3.7 million, five-year contract for ambulance service with the Jackson-Madison County General Hospital District, state auditors found in a review of the county’s finances.

The county commission first rejected a lower bid before negotiating the deal with the hospital district, which included services beyond the scope of the original solicitation, auditors found. But the documentation from those 2009 discussions was so spotty it was unclear why.

“Purchases should be made from the vendor with the lowest price that meets bid specifications unless adequate documentation is on file supporting the decision to reject the lowest bid,” state comptroller’s office auditors wrote. County officials did not respond formally in the report, but “officials provided various reasons why the bids were rejected,” the audit says.

Auditors also criticized the parks and fair board, which entered into a lease agreement without county commission approval. The audit of fiscal year 2010 finances also found that the county was unable to produce financial statements in line with generally accepted accounting procedures and that spending exceeded appropriations by as much as $9,000 in a handful of budget categories.

TNReport has been keeping up with audits from the state comptroller’s office, including these recently posted reports:

County Not Tracking Road Material Use: Audit (Jan. 21)

Financial Disclosure Info Lacking on State Board of Education Members (Jan. 26)

Red Ink Runneth in Crossville (Jan. 28)

Moore County Officials Spent More Than They Had (Jan. 31)

Readers can peruse the original audit reports, linked from TNReport blog items and posted at the state comptroller’s website.