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Comptroller: Jackson Assisted Living Facility Misspent Most of Nearly $55K State Grant

Press release from the Tennessee Comptroller of the Treasury; August 6, 2014: 

The administrator of the Jackson Street Faith Home in Jackson, TN properly used just $85 of the $54,650 in state grant funds the home received to assist with the care and services of low income residents. A new investigative report from the Tennessee Comptroller’s Office reveals that much of the grant money was misspent or used for questionable expenses.

The Jackson Street Faith Home is a residential assisted living facility housing approximately eight full-time residents. The home received $54,650 in Quality Enabling Program (QED) funds from the Tennessee Department of Health, Division of Health Care Facilities over a three year period.

The Comptroller’s Office was asked to investigate after the Department of Health notified the Tennessee Bureau of Investigation about the alleged misappropriation of state grant funds. Investigators discovered a cash shortage of at least $38,235.43 as a result of misspending, falsified or no documentation, and documentation submitted outside the grant period. Investigators also identified $16,329.57 in questionable expenses.

The home’s administrator admitted using bad judgment and creating phony invoices that were submitted to the state as documentation. The Comptroller’s findings have been sent to the District Attorney General for the 26th Judicial District for consideration.

Comptroller investigators are recommending the Department of Health take steps to recover the QEP grant funds. The Department should also properly monitor grantee expenditures to provide proper accountability.

“It’s a shame that money intended to care for some of Tennessee’s most vulnerable and disadvantaged citizens was used for an administrator’s personal benefit,” Comptroller Justin P. Wilson said. “We must ensure state grant money is being used appropriately.”

Funding appropriations for the Residential Homes for the Aged Quality Enabling Program were eliminated by the Tennessee General Assembly in 2012. The Jackson Street Faith Home’s license was closed as of January 21, 2014.

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

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Comptroller: More Than $500K in Stolen County Funds Never Recovered

Press release from the Office of TN State Comptroller Justin Wilson; June 11, 2013:

In the 2012 Report of Cash Shortages, auditors found that $563,372.50 of funds stolen from county governments, some dating back several years, had not been recovered. Details about the missing money can be found in the report, which was released today.

The news in the report wasn’t all bad: For the reporting period, auditors reported new thefts of $106,495.27 – down from $213,635.66 the year before. And – thanks to the recovery of $279,817.21 last year – the statewide balance of uncollected funds dropped from $736,694.44 cited in last year’s report to $563,372.50 in this year’s report.

Information about cash shortages is collected from the annual financial reports and special reports for the state’s 89 counties audited by the Comptroller’s Division of Local Government Audit and the six counties audited by private accounting firms.

In addition to a county-by-county breakdown of cash shortages, the report also provides explanations of how the shortages were detected, how the money was stolen, corrective steps taken by counties and legal actions taken against those responsible for the thefts.

“While it is good to see that the number of new thefts was down last year and a substantial amount of money was recovered, there’s absolutely no reason to be complacent about these statistics,” Comptroller Justin P. Wilson said. “It’s important for our local government officials to constantly remain on guard against the potential theft of taxpayer money. That means they need to have good checks and balances – what our auditors refer to as ‘internal controls’ – in their procedures for how money is collected, recorded, deposited and spent. If adequate safeguards aren’t in place, the amount of stolen money identified in future cash shortage reports is likely to rise.”

To view the report online, go to: http://comptroller.tn.gov/repository/CA/2012/2012%20Cash%20Shortage%20Report.pdf

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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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Comptroller Audit: Rockwood Employee Charges $32K in Personal Expenses to City Credit Card

Press release from the Office of the Tennessee Comptroller of the Treasury; February 27, 2013:

Investigators from the Comptroller’s office have discovered that a former Rockwood city coordinator used a city credit card and a city store charge card to purchase at least $32,725 in property and services for his personal benefit over a period of about three years. These personal purchases included nearly $12,000 in guns, ammunition and firearm accessories, more than $7,000 in clothing, nearly $6,000 for camera equipment, more than $4,000 in online college tuition and nearly $4,000 for other miscellaneous personal items.

An investigative audit released today details how the former coordinator, Tom Pierce, used the city credit card to purchase at least 11 guns, including a tactical shot gun, a .308 rifle, a .44 caliber revolver, and two 9 mm pistols. These guns were registered to Pierce personally, not on behalf of the city. He also used the city credit card to purchase holsters, rifle scopes, tactical sights and ammunition.

Additionally, Pierce used the city credit card to also purchase clothing for his personal benefit at a total cost of $7,263. The clothing purchased includes polo shirts, cargo shorts, underwear, socks, women’s jeans, suit separates and running shoes. Additionally, the report details how Pierce used the city credit card to purchase premium cameras and photography equipment costing at least $5,697, including two Olympus cameras priced at more than $1,200 each.

Although the city owned various inexpensive digital cameras used by employees, both the current mayor and the former mayor told the Comptroller’s investigators that they had no knowledge Pierce had purchased premium camera equipment at the city’s expense. According to the Comptroller’s report, Pierce used the city credit card to charge business management courses totaling $4,190 from an online college and also used the city credit card to purchase other personal items with a total value of $3,675, which included protein powder, testosterone booster, digital music, books and movies.

Investigators determined that all of these charges were paid for with city funds. Both the current mayor and the former mayor told investigators that they had no knowledge Pierce had purchased the personal items at the city’s expense, either. They also indicated that they would not have given permission for the city to pay for such expenses.

“It is unacceptable for people in positions of public trust to abuse that trust at the expense of local taxpayers,” Comptroller Justin P. Wilson said. “I commend our investigators for helping to bring these issues to light. I also want to thank the district attorney and his staff for the work they have done on this case.”

This month, the Roane County Grand Jury returned a seven-count indictment against Pierce for theft, fraudulent use of a credit card and official misconduct.

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

To view photos of some of the personal items purchased with city funds, go to: http://www.comptroller.tn.gov/repository/NR/20130227RockwoodReleasePictures.pdf