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Upper Cumberland spends millions of taxpayer funds on luxuries

By   /   September 25, 2012  /   News  /   Comments Off on Upper Cumberland spends millions of taxpayer funds on luxuries


Officials with the Upper Cumberland Human Resource Agency squandered $2 million of taxpayer money on travel expenses, lavish meals and entertainment and other luxuries, according to a new report from the State Comptroller’s Office.

The expenses had absolutely nothing to do with the public interest, according to Comptroller Justin Wilson.

The Agency serves 14 counties in the Cumberland Plateau region with a 63-member board comprised of various county and city mayors and derives the vast majority of its funding from state and federal governments.

Tennessee Watchdogleft a message seeking comment from Executive Director Luke Collins, but Collins was unavailable, according to one of his staff members.

Luke Collins


Among the findings cited in the Comptroller’s report:

  • Agency officials spent nearly $60,000 on a trip to Washington, D.C. in March 2011 to meet their Congressional representatives. Investigators found numerous receipts, apparently for 30 agency officials, employees and guests. On several occasions, officials charged more than $3,000 per meal for lavish dinners including alcohol.  On a single meal at Washington’s Oceanaire Seafood Room, 34 agency guests consumed nearly $5,000 in food, including more than 30 alcoholic beverages.  The costs of such extravagant meals were typically split between two agency credit cards, ostensibly to conceal the high costs.
  • During the same Washington D.C. trip, the agency spent $1,255 for officials, employees and guests to attend a performance at Ford’s Theatre, $289 for a visit to Madame Tussauds Wax Museum and $284 for a trip to Mount Vernon.
  • Agency officials made frequent trips to Nashville each year, where they charged expensive meals and alcoholic beverages on agency credit cards, all to entertain agency board members and legislators. In February 2010, for example, the agency spent $2,361 for 25 guests at Morton’s Steakhouse, dividing the dinner check among three agency credit cards.  In August 2010, seven guests were treated to $85 in pre-dinner cocktails before an $807 dinner at Morton’s at the agency’s expense.  In October 2010, the agency spent nearly $10,000 to have its annual meeting in October 2010 catered and more than $8,500 for a staff holiday party in December 2010.
  • The agency provided its training and resort property, Lakeside Resort and Educational Training Complex, at least $1.6 million in subsidies since 1995.  Even though there appeared to be no effort to recover this financial support, the agency recorded this receivable as an asset on the financial records, yet wrote off the entire debt in 2010 as uncollectable.
  • During the 2006, 2007, 2009, and 2010 fiscal years, Upper Cumberland Human Resource Agency purchased gift certificates from Lakeside, totaling $123,200 for training events to be held in the subsequent year. The advance purchase did not appear to provide any benefit to the agency, other than Lakeside immediately recognized the revenue in the year the advance purchase was made rather than in the year that the service was provided. By doing so, it overstated the recorded profit for one fiscal year and understated the profit in the subsequent year. Such a practice is not in accordance with generally accepted accounting principles.
  • The agency provided and paid for multiple communication devices for certain employees. Some employees had a cell phone, a smart phone, and a blackberry, all paid for with public funds. The agency paid for about 160 mobile devices at a total cost of $105,613 during the 2011 calendar year. Also, the agency provided subscriptions to OnStar for two agency vehicles, at a cost of $574 per year.
  • The agency contracted with and paid $4,194 to two individuals who provided clerical and maintenance services for Cannon County government in 2009 and 2011. However, these contracts were not part of any agency-wide program and there was no written agreement or contract with Cannon County outlining the duties and responsibilities of both organizations. In addition, no other local government was provided this benefit.

The report also faulted the agency for not having any written policies related to travel and credit card use and for not using vehicles that were clearly marked as publicly funded.

“The Comptroller’s office continues its review of the Upper Cumberland Development District and a separate report will be issued on that matter at a later date,” according to the report.

FOLLOWUP: After this story was initially published, Collins told Tennessee Watchdog that the agency’s board of directors has since streamlined operations.

“All the findings on that audit have already been taken care of, without any government or media pressure,” said Collins, who assumed the executive director’s position three months ago.

“The organization was not transparent and the board did not know a lot of things, but they learned. The board started its own internal investigation so that the agency could be good stewards of taxpayer dollars.”

The agency had already laid off about half the employees who took advantage of the various luxuries, Collins said.

“In their defense, the boss at the time told a lot of them to go on the trip and said that the agency would pay for their debts,” Collins said, in reference to former Executive Director Phyllis Bennett, who died of cancer earlier this year.

Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at chris@beacontn.org

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