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Wilson Reelected TN Comptroller

Press release from the Office of the Tennessee Comptroller of the Treasury; January 14, 2015:

The members of the Tennessee Senate and House have re-elected Justin P. Wilson to serve as the Tennessee Comptroller of the Treasury. The vote by acclamation was taken during Wednesday’s joint convention of the 109th General Assembly.

Wilson is Tennessee’s 34th Comptroller of the Treasury and was re-elected to his fourth two-year term. He leads a staff of more than 500 employees.

The Comptroller’s duties include the audit of state and local government entities and participation in the general financial and administrative management and oversight of state government.

“I am very pleased to serve a fourth term as Tennessee’s Comptroller,” said Comptroller Wilson. “I appreciate the General Assembly’s support and confidence, and I pledge to continue our office’s mission of improving the quality of life for all Tennesseans by making government work better.”

If you suspect fraud, waste or abuse of public money in Tennessee, call the Comptroller’s toll-free hotline at (800) 232-5454, or file a report online at: www.comptroller.tn.gov/hotline. Follow us on twitter @TNCOT

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Comptroller: More than $200K Stolen by Former TN Prison for Women Employee

Press release from the Tennessee Comptroller of the Treasury; September, 9, 2014:

A special investigation by the Tennessee Comptroller of the Treasury has determined that Mary Williams, a former Tennessee Prison for Women trust fund custodian, took at least $216,845 from inmate trust fund accounts during a 33 month period. The scheme was first exposed by the Law Enforcement Unit of the Tennessee Department of Correction’s Investigation and Compliance Unit. The investigation was performed in conjunction with the Tennessee Bureau of Investigation.

Investigators discovered that Ms. Williams created fraudulent deposits into selected inmates’ accounts to make it appear as if those accounts had available funds. Ms. Williams then issued checks from those accounts, and used the money for her personal benefit. This was done without the authority or knowledge of the inmates or prison officials.

On September 5th, Williams was indicted by the Davidson County Grand Jury on one count each of theft over $60,000, forgery, computer fraud and official misconduct. She was arrested and booked into the Davidson County Jail on September 8th.

Investigators recommend that prison officials separate financial duties in the office. No single employee should have the authority to record deposits, direct withdrawals, and have access to completed checks. Allowing one employee to have complete control over a transaction increases the risk of fraud.

“Time and again we are finding that one individual has complete control over accounting functions,” Comptroller Justin P. Wilson said. “Our office is committed to protecting taxpayer money, and it’s important that adequate checks and balances are put in place to eliminate fraud, waste and abuse.”

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

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Comptroller: Nearly $44K in ‘Questionable Purchases’ at Webb Creek Utility District

Press release from the Tennessee Comptroller of the Treasury; September 3, 2014:

Tennessee Comptroller investigators have identified $43,929.42 in questionable purchases made by the former management of the Webb Creek Utility District in Gatlinburg, TN. Investigators reviewed records for the period January 1, 2010 through April 30, 2013 in conjunction with the 4th Judicial District Attorney General.

The questionable purchases include $19,320.24 in Christmas gifts purchased by the former assistant district manager for employees and at least one board member. These gifts included electronic items, such as laptop computers and iPads, and gift cards. These purchases were not approved by the board of commissioners.

Other questionable purchases included $7,964.68 in food that the former assistant district manager admitted was for personal use. The former assistant district manager also purchased televisions and laptop computers at Sam’s Club that could not be located in the utility district office.

In addition, the district credit card was used at various restaurants to purchase $2,655.66 in meals. The majority of those purchases were at Alamo Steakhouse. The district’s travel policy provides reimbursement for meals only when an employee is on overnight travel status.

The former district manager and the assistant district manager provided written statements that they used district funds for personal use. They were both terminated on August 2, 2013.

Comptroller investigators also found that a customer’s $149.88 account balance was written off by another former manager in September 2013 in exchange for a .38 caliber revolver. In January 2014 the district manager reversed the write-off and wrote a personal check to the district. The board demoted the district manager from his position, however, he remains an employee of the utility district.

Comptroller investigators recommend the board provide adequate oversight of district operations and establish financial checks and balances. Additionally, one person should not have too much control over the district’s financial operations. The Board has indicated it is making changes and will seek financial restitution.

“Water and wastewater customers deserve to know their money is being used appropriately,” Comptroller Justin P. Wilson said. “Utility boards must stay engaged in financial operations to prevent the abuse of ratepayer dollars. Lack of oversight contributes to loss of money.”

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

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Comptroller: TN Makes ‘Extraordinary’ Sale of $345M in Higher Ed Facilities Bonds

Press release from the Office of the Tennessee Comptroller of the Treasury; August 27, 2014: 

The Tennessee State School Bond Authority has just completed the sale of $345 million of higher education facilities bonds to finance the costs of projects for the state’s higher education system. Tennessee’s excellent credit stimulated heavy interest from bond buyers, allowing bonds to be sold at historically low rates.

The School Bond Authority sold $132 million in 2014 Series A taxable bonds at a true interest cost of 3.59%. The bonds included new money and refunding bonds, the proceeds of which will repay a revolving credit facility, finance additional project costs, and refinance certain bonds outstanding. The refinancing will save the state’s higher educational institutions more than $6 million.

The School Bond Authority also sold $213 million of 2014 Series B tax-exempt refunding bonds. The true interest cost of 2.81% will result in an additional $17.8 million savings to the institutions. Buyer interest in the bonds allowed the School Bond Authority to reprice most of the maturities on the bonds from 5 to 10 basis points lower than the price that was initially offered.

“This may be the most extraordinary sale in the Authority’s history.” said Tennessee Comptroller Justin P. Wilson. “These low interest rates are a testament to the financial management and integrity of Tennessee’s higher education system and institutions. Taxpayers should be proud of this incredibly successful sale and the savings to the state’s institutions.”

The bonds were rated AA+ by Fitch Ratings, Aa1 by Moody’s Investor Service, and AA by Standard & Poor’s. All of the bonds have stable outlooks.

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Comptroller: Fmr. Jackson Co. Clerk Took Funds for Personal Use

Press release from the Office of the Tennessee Comptroller of the Treasury; November 26, 2013:

A new audit released today on Jackson County details how the county clerk admitted to taking public money for her own personal use.

During the course of a routine audit of the county’s books, auditors discovered that more than $10,000 in collections hadn’t been deposited in the bank. Five days later, the county’s records indicated that the money had been deposited in the bank.

The clerk, Mary Jo Matthews, told auditors she had occasionally taken money for her personal use, but always replaced the funds. Matthews was indicted by the Jackson County Grand Jury in August and resigned from her job as clerk earlier this month.

The audit also uncovered numerous other problems in other county offices with bookkeeping and money-handling procedures, including delayed bank deposits, backdated purchase orders, incomplete leave records and unbudgeted expenses.

The audit, which was conducted by the Comptroller’s Division of Local Government Audit, can be found online at http://www.comptroller.tn.gov/la/.

“Obviously, it is very disappointing when someone in a position of public trust uses that position for personal gain,” Comptroller Justin P. Wilson said. “It’s also very disappointing that Jackson County had so many other issues, some of which have been discussed in audits from previous years. Jackson County should work with its newly-established audit committee to correct the internal control and noncompliance deficiencies noted in the audit report.”

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Comptroller: Monterey Town Bulldozer Kept on Police Chief’s Property

Press release from TN State Comptroller Justin Wilson; June 12, 2013:

Allegedly, it was supposed to be used to clear a field for a police firing range. But documents and other evidence reviewed by the Comptroller’s Division of Investigations suggest that a bulldozer owned by the town of Monterey ended up on the former police chief’s property wasn’t going to be used for that purpose.

The investigators’ findings were part of a report that was publicly released today.

Monterey town officials obtained the bulldozer in early June of last year through the state’s military surplus program. In an agreement with the military surplus office, the police chief said that the bulldozer would only be used for law enforcement purposes and would not be leased to others, sold or otherwise disposed of by the town.

According to interviews with officials who were working for the town at the time, when the town received the bulldozer from military surplus, it was transported directly to the police chief’s property so a blade could be attached. The bulldozer was later moved back to town property after questions arose in a public meeting regarding its location.

A lease signed by the town’s former mayor and the former police chief seemingly explained the delivery and presence of town equipment on private land owned by the police chief. That lease document was not created until after citizens had made inquiries about why the bulldozer was on the property.

Investigators determined that the lease had been backdated to show that it was executed before the bulldozer had been delivered to the town. The lease was not actually written until five days after the bulldozer had been removed from the chief’s property.

Having town equipment on the former police chief’s private property without a valid contract in place exposed the city to unknown and potentially unlimited liability for any damages that could have occurred.

The police chief has resigned from his post.

Investigators also found that town officials improperly used a vehicle seized by law enforcement and kept an abandoned vehicle they were required by law to sell at public auction.“Just as it is important to guard against fraud, waste and abuse of public money, it is important to prevent publicly-owned equipment and items from being used for personal benefit,” said Comptroller Justin P. Wilson. “It did not appear from what our investigators found that the bulldozer was being used for the public purpose that Monterey town officials said it would. I encourage citizens who believe they have information about fraud, waste or abuse of public funds or public property to contact our toll-free hotline at 1-800-232-5454.”

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

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TN State ‘Constitutional Officers’ Re-elected by General Assembly

Press release from the Tennessee General Assembly; January 9, 2013:

(NASHVILLE) – In a joint session of the Tennessee Senate and the Tennessee House of Representatives today members unanimously re-elected Secretary of State Tre Hargett, Treasurer David H. Lillard, Jr. and Comptroller Justin P. Wilson. Secretary Hargett will serve his second four-year term, while Treasurer Lillard and Comptroller Wilson will each serve two-year terms. All three were originally elected to their posts by the General Assembly in January, 2009. Treasurer Lillard and Comptroller Wilson were re-elected to their second two-year terms in January, 2011.

Senate and House leaders congratulated the Constitutional Officers today, and released the following statements:

“While many Tennesseans don’t know what they do, the constitutional officers are really the unsung heroes of state government. They work – often behind the scenes but sometimes in the harsh glare of the media spotlight – to make sure that our state’s investments are managed properly, that public employees have a financially sound retirement system, that taxpayer money isn’t wasted, stolen or misused at the local or state levels of government, that local governments get the assistance they need to be successful in various levels of their operations, that our elections run smoothly, that our public libraries have the support they need to provide excellent service to Tennesseans. Tennesseans are lucky to have leaders like Comptroller Wilson, Treasurer Lillard and Secretary of State Hargett overseeing these essential services of state government.” –Lieutenant Governor Ron Ramsey

“Tennessee is in excellent financial condition – and the work of our three constitutional officers has played no small part in that. As members of the State Funding Board, they set revenue estimates that are used by the governor, his staff and members of the General Assembly for budget planning purposes. They also appear regularly before the major rating agencies that determine how strong Tennessee’s credit ratings will be. They also provide helpful advice and information to help members of the General Assembly do their jobs better.” –House Speaker Beth Harwell

“I am very proud of the work Treasurer Lillard, Comptroller Wilson and Secretary of State Hargett have done over the last four years. They have made many major improvements to make Tennessee state government work more efficiently and effectively which benefits all Tennesseans. All three of these public servants are well deserving of another term in office.” –Senate Majority Leader Mark Norris

“Reforming government is something that’s easy to talk about, but difficult to do. These three constitutional officers have spent the last four years challenging traditional thinking about the way their offices should operate and, as a result, their offices are operating more efficiently and effectively than ever before. They have made the offices more accessible by making more services available over the Internet and have found ways to maximize the productivity of their employees.” –House Majority Leader Gerald McCormick

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State Audit: ‘Serious and Pervasive Problems’ with TNInvestco

Press Release from the Office of Justin P. Wilson, Tennessee State Comptroller, November 13, 2012:

Audit Finds Serious and Pervasive Problems with the Department of Economic and Community Development’s TNInvestco Program

Tennessee’s TNInvestco Program, which is administered by the state Department of Economic and Community Development (ECD), has serious and pervasive problems, according to report released today by the Comptroller’s Division of State Audit.

TNInvestco was launched in 2009 as a program that provides tax credits to businesses which invest in certain types of start-up companies. The program was launched as a way to create jobs, foster entrepreneurial activity and infuse fledgling companies with capital. Recipients of the tax credits are chosen through an application process that requires them to meet certain criteria in order to qualify.

The Comptroller’s report details that the program was launched without adequate safeguards in place to determine that the companies receiving start-up funding were actually eligible to do so. Those safeguards are still lacking.

Auditors found that ECD failed to:

  • complete adequate annual reviews;
  • complete its annual report; or
  • evaluate program risks in its annual risk assessment.

Auditors also found that ECD did not ensure that the companies receiving tax credits:

  • completed statutorily-required investment strategy scorecards;
  • provided required accounting reports of specific procedures; or  provided audited financial statements in a timely fashion.

Without adequate documentation, top ECD officials might have difficulty determining if the required investment strategy benchmarks are being met and if investments are free from fraud, waste or abuse. Furthermore, the lack of documentation raises questions about how accurate reports can be provided to the governor’s office.

The audit also highlighted some other issues with ECD that are unrelated to the TNInvestco program. To view the report online, go to: http://www.comptroller.tn.gov/repository/SA/pa12060.pdf

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Comptroller Report: Homelessness Rising Among TN Public School Students

Statement from the Office of Tennessee Comptroller, Oct. 29, 2012:

Since the start of the nation’s economic downturn in late 2007, the number of homeless students in public schools has significantly increased both nationally and in Tennessee. Between the 2006–07 and 2009–10 school years, the number of homeless students identified in public schools increased by about 38 percent nationally (from 679,724 students to 939,903 students). In Tennessee, the number of homeless students in public schools increased by about 74 percent during the same period, from 6,565 students in the 2006–07 school year to 11,458 in 2009–10. The increases may in part be a consequence of job losses and other difficulties related to the economy that have affected families, but may also result from some school districts’ improved efforts to identify homeless students. This legislative brief describes the federal requirements under the McKinney-Vento Act for states, school districts, and schools concerning the education of homeless children and youth; the effects of homelessness on children and youths’ education, as well as effects for districts and schools; and some characteristics of children and youth in Tennessee who are homeless and enrolled in Tennessee schools, including their academic achievement.

Legislative Brief (pdf): http://www.comptroller1.state.tn.us/Repository/RE/Homeless%202012.pdf

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Tennessee Makes Record-High Bond Sale

State of Tennessee Press Release: Oct. 21, 2011:

The State of Tennessee entered the capital markets and sold $546,655,000 worth of bonds this week – the largest sale in the state’s history. Demand for the state’s bonds was high among investors, a reflection of the state’s strong credit ratings.

Earlier this month, Fitch and Moody’s Investor Services, two of the country’s major bond rating agencies, reaffirmed the state’s AAA credit rating, which is the highest available. Standard and Poor’s, the third major rating agency, reaffirmed the state’s AA+ rating, which is the second highest rating available. The state’s high ratings reflect its debt level, which is one of the lowest in the country.

Proceeds from the bond sale will be used to finance numerous projects throughout the state, including economic development grants for Volkswagen in Chattanooga, Wacker Chemie in Bradley County, Hemlock Semiconductor in Clarksville and Electrolux in Memphis. Those projects are expected to create 4,650 permanent jobs, plus thousands more in construction and related industries.

The bond proceeds will also pay for improvements to many state-owned buildings and properties, including a new driver license center in Memphis, renovations to the Supreme Court Building and other state office buildings in Nashville, a prison in Bledsoe County, a new library for the University of Tennessee-Chattanooga campus and infrastructure improvements to a research building on the Cherokee campus of the University of Tennessee-Knoxville.

The state also sold bonds to refinance some of its existing debt – which will save taxpayers approximately $5,559,000 million in interest payments over time.

None of the bond proceeds will be used to cover the state’s operating expenses or balance the budget.

“Our bond sale went extraordinarily well,” Comptroller Justin P. Wilson said. “Bonds were sold to a variety of investors including $35,000,000 to individual investors. For one category of bonds, we had nearly four times as many orders from investors as we were able to fill. This sale will help pay for four high profile economic development projects that will bring badly-needed jobs to our state, as well as other necessary improvements to our state’s infrastructure. Also, I believe taxpayers should be pleased that we were able to achieve a savings of about $5,559,000 million by refinancing part of our debt. We will continue to look for other opportunities to refinance more debt when market conditions are favorable for that.”