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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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Education NewsTracker

Running Gov’t Like a Business

A Maury County couple in charge of a county events building charged renters an additional fee and pocketed the money, state auditors have found.

“We were advised by the building manager and her husband that they required renters to sign a a separate contract and pay a separate maintenance fee to them personally in addition to the county’s approved contract and fee,” the audit by the state comptroller’s office said. “Both stated that differing amounts were paid based on who rents the building, with the maintenance fee ranging from nothing to $200.”

The couple, Elmer and Pauline Cooper, did not comment in a story on the findings by The (Columbia) Daily Herald. County officials defended them.

The county mayor, district attorney and a county commissioner whose committee oversees the Memorial Building describe the situation differently than state auditors, saying the Coopers were being paid for after-hours cleaning performed outside their normal scope of duties. …

(County Mayor Jim Bailey Jr.) said his investigation into the matter found no evidence the couple did anything wrong or that their actions cost the county money.

In its written response to the audit, county officials said Pauline Cooper would cease cleaning up the building or collecting any fees. Elmer Cooper resigned at the end of December, after being questioned about the fees in November, according to the audit and the Daily Herald report.

The audit also found that officials had overspent, by more than $175,000 total, its funds for parks, general sessions court and other services. County officials said expenses outpaced appropriations because “some charges get through in the month of June after the County Commission has met, and we are unable to get funds appropriated before the year closes.”

The county schools spent $75,000 more than had been appropriated in two pots of money within the general purpose school fund, auditors found.

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Auditor Pins Rhea Co. on Bookkeeping, Procurement Issues

Rhea County violated its own purchasing procedures when it bought $21,000 worth of wrestling mats for a high school without soliciting competitive bids, state auditors found.

The county’s policy requires schools purchases over $5,000 to be put out for competitive proposals.

“The failure to solicit competitive bids could result in the county paying more than the most competitive price,” state comptroller’s office auditors wrote in their review of finances at the end of fiscal year 2010.

In its response, the county finance director said the policy would be reiterated to department heads and that the county would “strive to make the procedures work.”

Auditors also found widespread problems in the county’s tracking of assets, from keeping up with paper records to being able to locate the items.

The records for the county and schools department “contained numerous material discrepancies, errors, and inaccurate calculations of accumulated depreciation balances,” auditors wrote. “In addition, the office did not have procedures in place to ensure that newly acquired capital assets were accounted for properly.”

Auditors also found that the inventory records of assets were incomplete, that there was no process for adding or deleting items from the list, and there was no independent verification of the records.

Auditors wrote that they had noted the problems previously in the 2009 report.

County officials responded by saying they would have more oversight of the assets records, and that they had obtained new equipment and hired a new employee to track assets. The recordkeeping would be audited internally “at regular intervals,” county officials said.

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Overspending in Smith Co.

Smith County had deficits totaling more than $3.5 million in funds for courthouse and jail maintenance, capital projects and solid waste disposal, according to an audit of the county’s finances at the end of the last fiscal year.

State comptroller’s office auditors reported that the largest share of the deficit stemmed from the $2.7 million in costs associated with closing a county landfill and monitoring it. In their response to the audit, Smith County officials wrote that they should have set up reserve funds for some projects at the courts building and ambulance facility and that the county is setting aside money on a regular basis to pay for closing the landfill.

Auditors also found problems with management of the county budget and in purchasing.

They found that appropriations exceeded estimated funding in at least half a dozen funds, including the money set aside for roads, the medical examiner and drug control. County management said a lapse in the special purpose fund has been remedied now that the county had turned over management of the fair to an outside group.

“Smith County had some bills that came in after the year was closed,” county management wrote. “Smith County will have to be more accurate on estimated expenditures in the future.”

Auditors pointed out that purchase orders had not been issued for some required purchases, and that the county had not solicited competitive bids for the purchase of fuel. The county officials responded by saying both practices were standard policy, and showed no sign of changing it anytime soon. Officials said that the county prefers not to bid out fuel because it would then be responsible for the environmental issues that come with owning fuel storage tanks.

The county highway department continues to be a target for thieves, with someone making off with a pickup truck valued at $7,800 and another $3,130 worth of tools and other items. Auditors said a similar theft had been reported the previous year and urged officials to develop and implement procedures to guard against such losses.

In the schools department, officials had failed to seek competitive bids for more than $95,000 in insurance, including more than $40,000 to cover buildings and their contents. Schools officials responded that they would seek competitive bids for liability insurance, but auditors wrote that they should seek bids not just for liability, but for all types of insurance they buy. State law requires competitive bids for purchases over $10,000.

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Cash Shortage in Monroe Co. Commissary Referred to DA

The Monroe County Sheriff’s Office had a cash shortage of $10,600 at the end of the last fiscal year, and because of poor accounting by the sheriff’s office it was not discovered until state auditors conducted a review.

The auditors have referred the matter to the district attorney, according to their report.

The shortage apparently stemmed from lax administration of the commissary.

The Sheriff’s Office says in its response to the audit that it has tightened controls over commissary cash and implemented regular reconciling of bank statements.

State auditors also found questionable payment records for expenses incurred by the county finance director. Among the findings were spotty records for travel expenses and a payment of $1,975 to the director for the purchase of computers, which were never delivered to the county. The audit says the finance director refunded the money.

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Hardin Co. Accounting Troubles

Expenses in Hardin County’s highway and public trust fund exceeded appropriations by about $310,000 at the end of the last fiscal year, according to an audit by the state comptroller’s office.

Two schools funds had a similar problem. Spending in the general purpose and school federal projects funds outpaced appropriations by a total of almost $26,000.

The schools employee insurance fund had a cash overdraft of $5,700 and a fund deficit of $13,600, based on having incurred more claims than the premiums could cover. Auditors said that money from the general purpose fund was later used to cover the deficit.

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County Corrections Agency

Hickman County officials should tighten control over the jail commissary, auditors said in a recent report on county finances, after finding the fund was in the red amid sloppy paperwork and management — in some cases, an inmate was issuing receipts for collections.

According to paperwork sheriff’s department officials provided, the inmates’ accounts had a negative balance of $7,500. For more than two dozen transactions totaling $4,100, there was no supporting documentation.

The findings were presented in a state comptroller’s office audit of county finances in fiscal year 2010.

The audit also said that no one at the county, its Health Foundation or school system has shown they can produce financial statements that comply with generally accepted accounting principles.

Auditors summarized some earlier work, which uncovered wrongdoing by Hickman officials.

The Hickman County Clerk’s office had a cash shortage of $4,600 as of mid-June, after state auditors discovered then-County Clerk Andrea Totty had manipulated the checking system to steal cash from the office.

Investigators also found that Totty had used her office to get free car tag renewals for herself and a friend, and that she’d taken an office computer home for her personal use.

Totty admitted to taking funds for her personal use and resigned in the wake of the investigation.

But she was not the only local official caught abusing her office.

The director of the Emergency Management Agency, Terry Cloud, and Emergency Medical Services, Michael Lynn, were found to have misappropriated drugs and supplies for their personal use.

Both pleaded guilty last year to official misconduct, but no restitution has been paid, and both employees are still on leave, the auditor’s report says.

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Van Buren Financial Records In Disarray

Van Buren County has had trouble balancing its checkbook.

That’s essentially one of the conclusions of a critical state audit of the county’s finances in 2010, which found discrepancies in different financial records and a failure to reconcile general ledger cash with other accounts. The county’s financial statements “do not present fairly” the county’s financial position, auditors with the state Comptroller’s Office wrote.

Invoices, checks and other records were in such disarray that auditors could not calculate the county’s liabilities at the close of the fiscal year.

And auditors “discovered checks payable to the county dating as far back as 2008 for various purposes that had not been deposited with the county trustee.”

In its response to the audit, county officials said that they had made “the best attempt possible” to reconcile accounts, and that an outside consultant had been used to correct the problems.

The audit uncovered deficiencies in the county’s purchasing procedures, in the handling of a state grant for litter cleanup, and in tracking of personnel leave time.

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Bidless Business in Marion Co.

Marion County officials failed to get competitive bids for sheriff’s vehicles totaling $259,600 and did not follow the notice requirements in soliciting bids for a $104,000 oven hood for the school system, state auditors found in a review of the county’s finances for fiscal year 2010.

Auditors with the state Comptroller’s Office also faulted the school system for lax policy concerning county-issued credit cards. The school board had not adopted written guidelines for use of the cards, and officials could not provide documentation supporting more than $10,000 in credit card purchases.

Auditors found problems in purchasing. The schools department had issued some purchase orders after the purchases were made, defeating the purpose of the paperwork, and the county mayor’s office paid some invoices without documentation that the goods or services had been received.

Auditors highlighted cases of misappropriated money implicating a husband and wife.

The former secretary/treasurer of the Haletown Volunteer Fire Department, Billy Joe Henegar, was indicted in October after auditors found that he had cut checks totaling $92,600 for his personal expenses and kept some cash donations.

Henegar’s wife, Holly, the former county elections administrator, was also indicted in October after auditors uncovered warrants totaling $27,000 issued for work that was not performed.

Read more in the local coverage of auditors’ findings and the couple’s arrests.

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NewsTracker Tax and Budget

Drug Program Money Used On Landscaping

Unicoi County officials spent money meant for its drug control program on landscaping and other expenses questioned by state auditors.

A state audit has found that county officials used the drug control funds for “rentals, memberships and dues, repairs, landscaping, and other items that were of a questionable nature” under state law, which says the money must be used for drug enforcement, education and treatment, or for one-time law enforcement expenses.

Auditors also faulted other aspects of the drug control fund’s financial management, noting inadequate documentation in purchasing and payment processes and in employee travel.

The audit by the state Comptroller’s Office covers fiscal year 2010.

No documentation was available to prove that more than $50,000 in work on a county jail annex had been competitively bid, the audit found, and because the Jail Committee did not have minutes from its meetings, auditors could not determine whether the work was put out for bids. State law requires counties to solicit bids for projects over $10,000.

The audit also summarized the theft of thousands from a schools fund, a finding that auditors had made public last year.

A county schools fund was short $21,000 as of May 25, a revelation that ultimately led former schools finance director Angela Williams to plead guilty to multiple counts of theft and admit she had misappropriated schools funds for her personal use.

She resigned from the school system in May, the Johnson City Press reported.