By CHRISTOPHER BUTLER
Officials throughout Tennessee wasted or misused about $8.1 million in taxpayer money, according to a review of audits that the state Comptroller’s Office released in October.
In addition to one example of theft, local officials violated state law by not putting certain contracted services over $10,000 up for a competitive bidding process. In another example, more than $10,000 in unauthorized severance pay was handed out.
- An employee of the Soil Conservation Office allegedly stole office funds totaling $20,000.
QUEBECK-WALLING PUBLIC UTILITY DISTRICT
- Unaccounted for water at 37 percent. A water loss of 35 percent or more is considered excessive by state law.
CITY OF FRIENDSHIP
- Expenditures exceeded appropriations in the General Fund by $80,111 and in the Sanitation Fund by $5,849.
BROWNLOW UTILITY DISTRICT OF JOHNSON COUNTY
- Brownlow Utility District made payments on the Mining Town Road construction project in excess of the contracted amount and no controls have been established by the district over payments made on construction contracts to ensure that payments are not made in excess of the contracted amounts. During the 2012 fiscal year Brownlow Utility District entered into a construction contract totaling $549,590 for water lines servicing the Mining Town Road Area funded by a Water and Waste Disposal Systems for Rural Communities grant and loan. During the 2012 fiscal year payments of $579,379 on this contract resulting in an overpayment of $29,789 without being detected or established as a receivable by the Utility District.
BON DE CROFT PUBLIC UTILITY DISTRICT
- The District operated at a loss for the year ended June 30, 2012, the second consecutive year, which is a violation of state law.
CITY OF HENRY
- The City participated in the military surplus property program in which the City was given property at no charge. The City agreed to use the property for police department use only. The City used the property for purposes other than the police department.
- A City employee improperly charged a plane ticket to a City credit card. This was in violation of the official travel policy adopted in 2007.
- The City of Henry had expenditures in excess of appropriations in the General Fund.
MOWBRAY UTILITY DISTRICT
- Excessive water loss at 42 percent.
- Competitive bids were not solicited for tires purchased for the Ambulance Service totaling $11,918. Tennessee law requires public advertisement and competitive bids on purchases exceeding $10,000.
- Expenditures exceeded appropriations in three major appropriation categories (the legal level of control) of the General Fund: (1) Sheriff’s Department ($361); (2) Jail ($44,184); and (3) Interest on Debt – General Government ($523).
- As it pertains to the use of federal Child Nutrition Program Funds, two applications were approved for reduced price status when they should have been denied benefits.
- Competitive bids were not solicited for site preparation for an elementary school playground totaling $26,414.
- Hancock County issued a $110,800 capital outlay note to purchase school buses without the approval of the state Comptroller’s Office.
- General Fund total expenditures and other uses exceeded appropriations approved by the County Commission by $80,943.
- Expenditures exceeded appropriations in the County Trustee’s Office ($299), the Chancery Court ($38), the Administration of the Sexual Offender Registry ($44), and the jail ($196,881).
- The School Federal Projects Fund had a cash overdraft of $41,075.
- Expenditures exceeded appropriations approved by the County Commission by $9,728 in the Community Services major appropriation category of the General Purpose School Fund and by $42 in the Vocational Education major appropriation category of the School Federal Projects Fund.
- During the year, School Department officials purchased projectors using the federal Race-to-the-Top Incentive grant ($45,603) and Title I grant ($41,483) funds. Competitive bids were not solicited for these purchases.
MOORESBURG UTILITY DISTRICT
- The District has operated at a loss for several years because water rates were not high enough to provide for all operating expenses.
- Total expenditures and other uses of the Central Cafeteria and School Transportation funds exceeded total appropriations approved by the County Commission by $5,891 and $10,839, respectively.
- Expenditures exceeded appropriations in the following major appropriation categories (the legal level of control) of the General Purpose School Fund (by $56,127) and School Federal Projects Fund ($96,481).
- Salaries exceeded some line-item appropriations in the General Purpose School Fund by amounts ranging from $383 to $14,490.
- The director of schools entered into a three-year operating lease agreement totaling $79,500 with Taylor Associates Communications, Inc., which provided for the use and support of student reading software with payment terms of $26,500 annually. This lease agreement was not approved by the Board of Education and the County Commission.
- The county mayor did not solicit competitive bids for a fence expansion at the airport totaling $64,745. Instead of soliciting bids, the office used the same company that had installed the fencing at the airport in 2008. This expansion purchase was made using federal grant funds under the Airport Improvement Program non-major federal program and was an allowable program expenditure. The failure to solicit competitive bids could result in the county paying more than the most competitive price.
- General Fund expenditures exceeded appropriations approved by the County Commission in the County Coroner/Medical Examiner and Transfers Out major appropriation categories (the legal level of control) by $4,389 and $5,436, respectively. Such over-expenditures are a violation of state statutes.
- The Solid Waste Disposal Fund had a deficit of $1,032,539, in unrestricted net assets at June 30, 2012. This deficit primarily resulted from the recognition of a liability of $2,454,459 for future costs associated with closing the county’s landfill and monitoring the landfill for 30 years after closure.
- The director of schools did not solicit competitive bids for a geothermal project at Bolivar Central with a total contract price of $788,940. Instead of soliciting bids, the School Department used the same company that had done heating and air conditioning renovations at the school in 2002. This project was partially funded with federal grant funds.
- Expenditures exceeded appropriations approved by the County Commission in the Food Service major appropriation category (the legal level of control) of the General Purpose School Fund by $57,521.
- The sheriff entered into a contract with Oasis Management Systems, Inc., in October 2011 for commissary services at the county jail. The state Department of Human Services blind vendors program was not given priority for the commissary operation as required by state law. In addition, the commissary contract had not been competitively bid as required by the County Purchasing Law of 1983 and was not approved by the County Commission as required by state law.
- The sheriff did not obtain a letter of agreement or file suit in Circuit Court to authorize the number and salaries of his deputies. Tennessee law requires the sheriff to enter into a letter of agreement with the county mayor concerning the number and the salaries of deputies or to file suit in Circuit Court.
- The Solid Waste Disposal Fund had a deficit of $3,267,777 in unrestricted net assets.
- Competitive bids were not solicited for food purchased for the jail totaling $138,208.
- During 2006, the Highway Department paved 2.1 miles of a county road serving six property owners; however, .6 miles of the county road serves a single residence that includes a circle drive. The public has no access to this portion of the paved county road because the property owner erected a gate across the roadway.
- The Highway Department maintained private roads to cemeteries using county employees, materials, and equipment.
- The School Federal Projects Fund had a cash overdraft of $96,023.
- Competitive bids were not solicited to purchase a motorcycle ($24,657), an electronic outdoor sign ($25,885), two automobiles ($45,366), and fuel for the Landfill Department ($79,942). In addition, bids were not solicited to pave the library parking lot ($61,782).
- Expenditures exceeded appropriations approved by the County Commission in the General Purpose School Fund ($49,637) and the School Federal Projects Fund ($28,700).
- Solid Waste/Sanitation Fund expenditures exceeded appropriations approved by the County Commission in the Other Waste Collection major appropriation category (the legal level of control) by $16,304.
- The Highway Department maintains a payroll clearing account with the bank to deposit employee payroll taxes due the Internal Revenue Service (IRS) and is required to notify the IRS of these deposits so withdrawals can be made from the county’s account. In one instance, although the deposit for these payroll taxes was made to the clearing account, the IRS was not notified timely to provide for the current withdrawal of the deposit. The IRS assessed the county $998 for interest and penalties due to the county’s failure to notify the IRS timely.
- The Central Cafeteria Fund’s estimated beginning fund balance ($1,988,161) exceeded the actual beginning fund balance ($989,120) at July 1, 2011, presented to the County Commission by $999,041.
- The Veterans Service Officer, a part-time employee of the county, had office hours from 8:00 a.m. to 12:00 p.m. (four hours) every Wednesday; however, no time sheets were required to support these hours. This employee also worked part-time in the Juvenile Court and as a substitute teacher for the School Department. Auditors determined that this employee was paid for 53 hours by the School Department as a substitute teacher for the same time period he had been paid by the county for Veteran’s Service office hours. Auditors also discovered that this employee was paid for four hours by the School Department as a substitute teacher for the same time period he had been paid by the county for Juvenile Court hours, and 12 hours by the county for Veteran’s Service office hours he had been paid by the county for Juvenile Court hours. The resulting overpayment to this employee for overlapping time totaled $1,054.
- Perishable food commodities purchased for the county jail and workhouse were not bid. Tennessee law requires public advertisement and solicitation of competitive bids on purchases exceeding $10,000.
- Several employees had accrued vacation leave balances that exceeded the five-day maximum balance established by the county’s personnel policy.
- Numerous employees of the Sheriff’s Department had accrued vacation leave balances that exceeded the five-day maximum balance established by the county’s personnel policy.
- Employees of the Sheriff’s Department were allowed to accrue holiday leave even though holiday leave was not addressed in the county’s personnel policy.
- The Solid Waste Disposal Fund had a deficit of $334,063 in unrestricted net assets.
- The county litter control officer, pursuant to regulations adopted by the County Commission governing the cleanup of illegal dump sites on private property, formally requested that the highway superintendent demolish and remove a burned house located on private property. Rather than perform the work with Highway Department equipment and employees, the highway superintendent contracted with a company owned by his brother for the demolition and removal of the house for $10,000. The Highway Department did not solicit bids for this project, and no documentation was provided to document that any proposals were solicited.
- Director of Schools Wayne Goforth’s contract provided a flat rate of $300 per month for local travel using his personal vehicle. Mr. Goforth was placed on administrative leave with pay beginning October 19, 2011, but continued to receive the monthly travel allowance resulting in payments of more than $2,400 for travel when the director was not conducting School Department business. The director received the annual amount of $3,600 for the monthly travel allowance without filing any documentation of actual travel expenses incurred; therefore, this reimbursement would be considered taxable compensation. However, those payments were not paid through the School Department’s payroll system and were not subjected to income tax, Social Security, or Medicare deductions. Also, the School Department did not report and pay its required matching portions of Social Security and Medicare associated with these payments and did not report the payments to the Internal Revenue Service.
SALE CREEK UTILITY DISTRICT
- Unaccounted for water at 35.7 percent, in excess of the state allowable 35 percent
TOWN OF IRON CITY
- Three checks totaling $13,000 were issued for unauthorized severance pay. The Trustee’s attorney requested that the amounts be paid back to the Town of Iron City. One employee paid $1,000 back to the town. Two employees did not return the unauthorized money they received ($6,000 each).
Christopher Butler is the editor of Tennessee Watchdog and the Director of Government Accountability for the Beacon Center of Tennessee. Contact him at firstname.lastname@example.org