Committee learns how to fix issues audit found
Published 9:36 am Thursday, January 8, 2015
Members of Carter County’s Financial Management Committee got a lesson in finance procedure Wednesday, including a report on the county’s audit by the state and steps being taken to correct problem issues.
County Finance Director Ingrid Deloach began by going over each finding of the audit and explaining what steps the county had taken to correct the issue.
One of the major issues, Deloach said, is a recurring issue that has been ongoing for years in the Circuit Court Clerk’s Office.
“There are no missing funds,” she said.
There is an undesignated fund balance of money collected by the clerk’s office over the years, which the county has so far been unable to reconcile, Deloach said. Part of the problem, she said, was records of money taken in were not matched up properly with collections ordered by the court. As years went by, the problem got worse and worse.
“We have a pot of money and we’re not entirely sure where it needs to go,” she said. “The problem started in the 70s and it has just snowballed.”
Now, she said, the clerk’s office is working to go back and compare decades worth of records to match up money with where it needs to go. Previously the payments and disbursements were handled by the clerks, Deloach said. Now the office has a book keeper who handles the day-to-day operations to keep them in line and is also working to match up the undesignated funds to where they need to go.
“They have knocked it down tremendously,” Deloach said, adding the current Circuit Court Clerk Johnny Blankenship and his predecessor John Paul Mathes have worked on the issue for years. “I don’t know the very specifics of it but they have made improvements. It is just going to take a lot of time.”
Committee member Danny Ward said he would like to see a time frame set for the clerk’s office to have the issue resolved since the state noted that it is a recurring issue and has apparently been going on for some time.
“I’m all for resolving it,” Deloach responded. “I just don’t know how you’d set a time frame because we don’t know what we’re dealing with.”
Another finding by auditors that drew a large amount of discussion from the committee related to purchasing practices used by the Carter County Sheriff’s Department under the administration of now former-sheriff Chris Mathes.
According to the auditor’s findings, the Sheriff’s Department and Tennessee Business Enterprises, the operator of Carter County jail commissary program, circumvented the county’s purchasing statutes through their contracted agreement.
“Based on the TBE manager’s records, we were able to determine that between Aug, 11, 2009, and Aug. 12, 2014, the TBE manager disbursed approximately $75,847 at the discretion of Sheriff’s Department personnel,” the audit report said. “These disbursements consisted of sponsorships and donations to various churches, school organizations and civic organizations, including the Kiwanis Club, Chamber of Commerce and United Way. Disbursements were also made for expenses associated with employee functions, cable television services, K-9 expenses, ATV accessories, postal charges, flowers, training and jail-related expenses.”
The auditor’s report also singles out a specific disbursement from the funds that took place just weeks before Mathes left office when $2,300 was transferred from TBE to the bank account of a Sheriff’s Department employee as a bonus that was compensation that was approved by Mathes without the approval of the County Commission.
“This was unknown to myself and to the mayor,” Deloach said. “It was discovered by the current administration and reported to the state auditors.”
“There is an ongoing investigation on that and I am sure you will hear a more detailed report on that once it is completed,” she added.
Committee Chairman Ray Lyons said the action taken by the former sheriff in entering into this contract without the county’s approval was cause for concern. He then made a motion that the committee draft a letter to be sent to all the departments and elected officials that before any contracts, agreements or memorandums of understanding are entered into they be brought through the appropriate committee and approved by the full commission. Ward provided a second for the motion.
Deloach explained the county already had a procedure in place for approving contracts and agreements and that procedure was not followed by Mathes. All money collected by county offices, with the exception of some fee-based offices, is required to be turned in to the county trustee’s office to be managed by the finance department, she said.
“Those commissary funds were never sent to the trustee’s office,” Deloach said. “Those funds should have been going to the Trustee’s and I can tell you they are now.”
Following the explanation by Deloach, Lyons withdrew his motion.
Deloach also touched on the other findings of the audit – giving explanations of the finding and detailing the county’s response.
After discussing the audit, Deloach gave a presentation to the committee on the Financial Management Act of 1981, which is the state law Carter County’s budget and financial management practices fall under. She also explained the responsibilities of the Financial Management committee and well as her own duties and the responsibilities of her office.
Deloach then provided committee members with a copy of the county’s financial management policy and procedure manual and asked the members to review it and recommend any changes at the next meeting. Once the manual is reviewed and approved, she said she would distribute copies to all the departments and elected officials.