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Comptroller Investigation Finds Hamblen Co. Solid Waste Director Stole More Than $225K

Press release from the Tennessee Comptroller of the Treasury; March 5, 2015:

A special investigation by the Tennessee Comptroller of the Treasury has revealed the former director of the Hamblen County/Morristown Solid Waste System stole at least $227,972 in system funds. Ronald Brady admitted to Comptroller investigators that he used the money for his personal benefit. This investigation was completed in conjunction with the Tennessee Bureau of Investigation.

Investigators discovered Mr. Brady took system funds over a 3 ½ year period using several schemes. Mr. Brady issued unauthorized checks to himself totaling at least $196,206 from the solid waste system bank account and used the money for his personal benefit.

Mr. Brady also used the solid waste system’s American Express card to charge at least $31,785 in personal purchases. These purchases included vacations to Walt Disney World and other resorts, servicing his BMW and GMC Yukon, and a mattress that Mr. Brady requested to be delivered to his home. The charges were paid through the solid waste system’s bank account. Comptroller investigators also found Mr. Brady used solid waste system funds to make payments totaling $3,801 on a non-system credit card.

Mr. Brady destroyed, discarded, or altered solid waste system records to conceal his schemes. He was able to take the money without the knowledge or authorization of the solid waste system’s board. Ronald Brady resigned as director in February 2014.

On March 2, 2015, Ronald Brady was indicted by the Hamblen County Grand Jury on one count of theft over $60,000.

Comptroller investigators recommend the solid waste system implement checks and balances to ensure that one employee does not have complete control over a financial transaction from beginning to end. A credit card policy should also be established that allows all charges to be reviewed and documented.

“Solid waste customers make sacrifices each time they pay their bills,” Comptroller Justin P. Wilson said. “They must have confidence their dollars are being used appropriately, and it is shameful that a director would steal this money for his own gain.”

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

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Press Releases

Comptroller Audit Uncovers Theft of Morristown Animal Shelter Funds by Employee

Press release from the Office of the Tennessee Comptroller of the Treasury Justin Wilson; May 22, 2013:

An employee of the Morristown-Hamblen Humane Society altered receipts to conceal the theft of $51,130 from the organization’s adoption fees and other funds, an audit by the Comptroller’s Division of Investigation has revealed.

Receipts in the humane society’s computer system were backdated – up to 11 years before the installation of the computer system – so they would not be included in daily collection reports. That meant money from adoption fees and other sources didn’t appear in the organization’s records. Investigators concluded that money was stolen by the employee, who was later fired.

Investigative auditors reviewed records from July 1, 2009 through October 31, 2011 after Hamblen County officials discovered the altered receipts from collections were not deposited into the humane society’s bank accounts. The stolen funds should have been used to operate the animal shelter, enforce animal control ordinances and conduct animal cruelty investigations.

The employee involved had been responsible for gathering collections, matching collections with receipts and delivering those collections to the bookkeeper for deposit. During questioning by investigators, the employee admitted to backdating one receipt to “borrow” $120. The employee refused to speak with investigators after being fired.

Investigators also found weaknesses in the humane society’s accounting and record-keeping procedures, which made the theft easier to conceal.

“It is very important that there is an appropriate amount of oversight when public funds are being accepted, recorded and spent or deposited,” Comptroller Justin P. Wilson said. “Putting too many responsibilities in the hands of one individual without that kind of oversight can create situations that are ripe for fraud or abuse. It is very unfortunate in this case that money that could have been used to help stray and abused animals in Hamblen County isn’t available for that purpose because of this.”

The Comptroller’s Division of Investigation has forwarded copies of its report and supporting information to the Office of the District Attorney, Third Judicial District.

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