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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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NewsTracker

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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News NewsTracker

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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News NewsTracker

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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News NewsTracker

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.

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NewsTracker

County Fails to Bid Out Jail Food Contract

Sequatchie County officials did not seek competitive bids for more than $110,000 in food for the jail, state auditors found, violating a state law that calls for bids on contracts worth less than a tenth of that amount.

Contracts worth $10,000 or more must be bid out, state law says, in an effort to get the best deal for taxpayers.

Auditors with the comptroller’s office also faulted the county executive’s office handling of budget matters, in their review of finances in the 2010 fiscal year. Among the complaints:

  • The budget approved by the County Commission conflicted with the budget submitted to the state comptroller.
  • County officials spent almost $95,000 more than they had available in the ambulance service fund.
  • Expenses exceeded appropriations by $50,000 in a major general fund category.
  • In certain funds the actual balances as of July 1, 2009, differed significantly from the numbers officials presented to the county commission — in the general fund the estimates were off by $381,000.

Auditors also found problems in the county’s capital asset records, and said the county staff do not have the skills necessary to produce financial statements that follow accepted accounting standards. These two findings had been noted for three or more years, auditors wrote, leading them to conclude that county officials are “either unwilling or unable to address the deficiencies.”

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NewsTracker Tax and Budget

Haywood Co. Running $1.4M Deficit

Haywood County is bleeding red ink to the tune of more than $1.4 million in its solid waste disposal fund at the end of the last fiscal year, after state auditors adjusted the books to reflect the almost $1.8 million it will cost to close the county’s landfill and monitor it for three decades.

The issue of landfill costs is one facing Jefferson, Hardeman and Cumberland counties.

Auditors with the state comptroller’s office also found that Haywood County officials’ spending had exceeded appropriations in the Civil Defense and Parks and Fair Boards funds, the latter by almost $28,000.

Auditors had to correct various general ledger balances and criticized the county for not moving on a prior recommendation to train a staff member in the proper preparation of financial statements. Both problems had been reported for three or more years, auditors said, suggesting the county “is either unwilling or unable to address the deficiencies.”

The county also did not have a system for accounting for road materials on certain projects, auditors noted.

TNReport follows and reports on newsworthy audits of local and state government. Here’s a sampling of our recent items:

Missing Cash Leads to Charges of Theft Against Morgan County Clerk, Feb. 15

County’s Finance Standards Faulted, Feb. 15

Troubles in East Ridge, Feb. 11

Jefferson Co. Busts Budgets By $70K, Feb. 10

Hardeman County Trash Fund $1.7M in the Red; Money Stolen from Commissary, Feb. 9

Fentress Forgeries, Feb. 2

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NewsTracker

Missing Cash Leads to Charges of Theft Against Morgan County Clerk

An east Tennessee county clerk took money home instead of depositing it to the office’s bank account, state auditors have found.

The auditor’s investigation — which identified more than $54,600 in missing funds — led to Morgan County Clerk Carol J. Hamby being indicted for theft, official misconduct and violation of a state law that requires public funds to be deposited within three days of receipt.

The Knoxville News-Sentinel has been reporting on the indictment and state comptroller auditors’ findings.

Under pressure from the investigation, Hamby returned more than $47,000, though some $7,400 was still missing as of late December, according to the report.

In a paraphrased response included in the audit, Hamby said she would not comment in detail because of the pending legal action but said she strived for “transparent record keeping.”

I made wrong decisions that allowed me to be in this situation. I have worked my absolute best to insure (sic) the customers had great quality service. All money was submitted to the Tennessee Department of Revenue, the Tennessee Department of Safety, Tennessee Wildlife Resources Agency, and any other state agency.

I focused heavily on some areas of my office and not heavily enough in others. … There are times I thought with my heart and not my brain. We all learn with age and experience.