State finds ‘significant deficiencies’ in county’s financial management for second year

Published 3:29 pm Tuesday, March 19, 2024

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By Buzz Trexler

Star Correspondent

An annual audit from the Tennessee Comptroller of the Treasury has resulted in a second year of chastisement regarding Carter County’s financial management, according to a release from that state department.

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 “The latest audit of Carter County shows that much work is necessary to improve the financial management of the county government,” the state reported in a release Tuesday. “The annual audit for the fiscal year ended June 30, 2023, reveals material weaknesses, significant deficiencies, and noncompliance within the Office of the Finance Director.”

 There were 10 findings, the state said, six of which were a repeat of the findings found in an audit of the fiscal year 2022. Two of the findings are connected to state investigations of the Carter County School District and the Solid Waste Department that were released in 2023.

 “The first finding in the audit shows that Carter County did not comply with its policy to develop a balanced budget for the 2023 fiscal year because the county budgeted to use fund balance instead of current revenues to support its operations,” the state said Tuesday in the release.

 The state report cited several deficiencies in the Office of Finance Director, which included a failure to properly maintain accounting records; a failure to hold spending within the limits authorized by the County Commission; being deficient in the posting of journal entries; not maintaining capital asset records properly; and not properly placing amounts withheld from contractor payments in an escrow account.

 “Carter County officials should recognize that these audit results are not acceptable,” said Mumpower in the release. “The county had 11 findings last year and 10 this year, which is significantly more than the average Tennessee county. County Commissioners, the Financial Management Committee, and the Audit Committee should exercise their authority to provide oversight and accountability.”


Finance Director Responds

 Carter County Finance Director Carolyn Watson said in an email that the findings did not reflect “the hard work and dedication that our current finance team exhibits as we continue to improve the financial operations in Carter County.”

 “We knew that because some of the findings originated from several years ago it would take more than one year to get all the problems resolved,” Watson said, adding that the department is working toward that process and has made “significant improvements over the past year but still have more to accomplish.”

 “Given the extensive amount of turnover and unfilled staff positions the department experienced a couple of years ago, it has taken longer than we had hoped to update the procedures necessary to get all the prior year audit findings cleared,” Watson said. “We had hoped that the changes we have put in place would have been reflected more in this past year’s audit report.”

 Watson said most of the finance staff had been employed for three years or less and now has a dedicated team and there have been “extensive changes” in prior administrations’ procedures. She noted there was a commission-approved budget by the June 30th deadline in 2023.

 “We continue to focus on the positive changes that we have made and strive to find other areas that may need improvement to provide the best results,” Watson said.  “As part of the audit this year we also added to the management response in order to highlight some of the changes and additional processes we made that should put us in a better position for the upcoming fiscal years.”


Director of Schools Responds

 There was one finding in the Office of the Director of Schools that included a deficiency in internal controls and one noncompliance issue.

 Carter County Director of Schools Brandon Carpenter’s office responded to a request for comment with an email that said, “The Tennessee Comptroller’s Office released a report on the investigation into the Carter County Schools’ Transportation Department. The report concluded that time and attendance records within the district’s transportation department had not been properly maintained and inspection log deficiencies were found. These findings resulted in an internal control deficiency. The period referenced in the report was from January 2022 until June 2022.

 “Carter County Director of Schools, Dr. Brandon Carpenter, has worked cooperatively with the Comptroller’s Office to ensure corrective actions were implemented and past deficiencies have been addressed.”

 There were three findings in the Office of Solid Waste Department:

 — The department had accounting deficiencies.

 — There was a failure to review its software audit logs.

 — An investigation disclosed deficiencies in internal controls.

 According to the release, the findings and recommendations have been reviewed with county management.