Marshall County Financial audit uncovers problems
Each fiscal year ending in June the County Audit Division of the State of Tennessee Comptroller of the Treasury Department begins its audit, which includes the first six months of the current year and the last six months of the past year.
The Audit Division will begin work on the 2005-2006 audit on July 1. The financial statements and records of every county office for the current fiscal year are under scrutiny.
This past audit, which ended June 30, 2005, resulted in 12 findings concerning the County Mayor's office, the Sheriff's office, the Circuit Court Clerk's office and the Road Superintendent's office.
According to Richard Normant of the County Audit Division of the Tennessee Comptroller's office, recommendations are made at the end of every audit. If an office that has received a recommendation chooses to act, then they may report it to the Comptroller's office at any time, however, the County Audit Division will review the progress of the listed recommendation during the completion of the next audit.
"We normally wait. We do follow up procedures in next year's audit cycle," said Normant.
According to officials at each county office, each recommendation has either already been addressed and explained or resolved.
According to Marshall County Budget Director, Freda Terry, complying with Tennessee Code Annotated Sections 5-14-201 through 5-14-206, which requires competitive bids to be taken for all purchases exceeding $5,000, proved difficult concerning gasoline and cleaning services.
During fiscal year 05-06, the county spent $62,934 on gasoline and $95,129 on cleaning.
"We have not figured out a good way to competitively bid for gasoline. It is one of those things that looks good on paper, but when it comes down to actually putting it into a plan, it becomes a different story. Nobody will give a 12 month quote on gasoline because of the flux in the price. It changes so drastically between the winter and summer months that a company could not give a fair estimate," said Terry.
The county currently purchases its gasoline from Shell's Fleet Service. According to Terry, due to the massive amounts of gasoline that the county requires, Shell automatically gives them a discount of four cents to the gallon.
The county has, however, taken bids for cleaning services. The problem that the state comptroller's office has is that those bids were taken more than eight years ago.
"We originally bid on three separate occasions," said Terry.
The county accepted the lowest bid on the first occasion and according to Terry they soon regretted the decision.
"They would steal from us. We would find certain things missing, even small items, such as stamps," she said.
When the cleaning service was let go, the stealing stopped, she said. However, after the second bid was secured, the cleaning service that had won, said Terry, did everything but clean.
"We came in one morning and found where they had left an ABC catalog order on one of the desks where they had been shopping," she said.
When it came time to accept a third bid, the county looked for a company with a good reputation as opposed to the lowest bid.
"The local county attorney recommended the cleaners that we have now, and they do an excellent job. They are also honest. I came in one morning and they had left a ten dollar bill on my desk with a note attached to it that said, 'someone must have lost this $10 down stairs'," said Terry.
They have also only requested one pay raise since 1997, she said.
"We did what we thought was best for the county offices and the county's taxpayers," Terry said.
A misappropriation of funds regarding the county's veteran's service office, which falls under the responsibilities of the county mayor's office, was reported in the last audit. The misappropriation resulted in a cash shortage of $1,353.16.
Terry explained that the shortage came from the veteran's van account. The account was set aside for the officer of the veteran's service office, which is located at the Hardison Annex, to be able to operate the van without using taxpayers' money. All of the proceeds that were set aside for the fund were gathered from donations and fundraisers.
Terry discovered the misappropriation before the state comptroller's audit during one of her own audits. She said that former veterans officer, William R. Henson, Jr., had some discrepancies in the account's ledger.
"He would buy office and plumbing supplies with the money from that account, and it was supposed to be specifically for the operation of the van and its maintenance. There were also several entries where it was blatant that it was not veteran related," said Terry.
She assures that Henson is currently in the process of repaying the money.
"That account will soon be back in good standing," she said.
Terry, along with County Mayor Terry Wallace, has established a new system that is designed to help the new veterans officers keep the van account in check. They now have to seek prior approval from both Terry and Wallace and each check requires both of their signatures.
The Marshall County Sheriff's Office was also dealt a similar blow during the process of last year's audit, but on a much larger scale.
The state comptroller's office had discovered that there was a shortage in the inmate commissary account of $14,359.88. The Sheriff's office discovered that then jail administrator, Betty Chumbley, had been taking the money over the course of that year.
"The whole thing was just so strange because just after they had discovered the problems with Betty's audit, then they came over to our office and began working on Bill's (Henson)," said Terry.
According to Marshall County Sheriff, Les Helton, the office was in both shock and denial.
"It was hard to believe, but I know that she feels remorseful and that she realized that she made a mistake," said Helton.
Chumbley pled guilty on all counts before Circuit Court Judge Robert Crigler. According to Helton, she has made restitution, and while it resulted in $8,601 additional cost to the county during that year, it has been repaid.
According to Helton, Chumbley was also responsible for handling the booking receipts. The audit confirmed that $6,500.09 of receipts were unaccounted for.
The Sheriff has since terminated the commissary account, and every check now requires no less than two authorized signatures.
Minor discrepancies concerning the Road Superintendent's office and the Circuit Court Clerk's office were also reported in the audit.
The Road Superintendent's Office failed to obtain prior approval by the County Budget Director for purchases exceeding $500. However, Chapter 17 of Private Acts of 2005 did not take effect until May 23, 2005. The fiscal year came to an end a little over a month later.
Road Superintendent, Jerry Williams' Secretary and Public Relations Advisor, Ella Wayne, explained that their office was not made aware of the problem until the auditors confronted them with their recommendations.
"When the auditors confront us with something, we will work to change it immediately," said Wayne.
She said that they now have the purchase orders signed by Budget Director Freda Terry.
The audit of the Circuit Court Clerk's office claimed that the short-term account activity to the cash journal was not properly posted.
Circuit Court Clerk Eleanor Brandon Foster explained that her ledger concerning the court awarded funds and the auditors' calculations were slightly different. A new account fell on June 30, the ending date for that fiscal year, and Foster's records were actually showing a higher balance. The balance in the ledger and the balance in the computer currently match.
"We've complied. We're in check and balancing to the penny," said Foster.
The upcoming 05-06 audit again will highlight the recommendations for each county office. According to County Auditor Normant, the best way to check for compliance is to check and see if the same recommendations appear on the next audit.