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March 25, 2008


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NEWS

County Audit Reveals Six Findings

NASHVILLE – The financial audit of the county of Carroll for the fiscal year 2006-2007 reveals six adverse findings. The report was released last week to the media by the Tennessee Comptroller of the Treasury.

In the first finding, the audit reveals that the late Paul Newmon, Circuit Court Clerk, was paid $1,629.59 more than permitted by state statute. Newmon died while in office and was paid in advance during the normal twice monthly pay period. At the time of his death on July 3, 2006, he was due $452.17, however the clerk’s estate received a payroll check, dated July 5, for the gross amount of $2,078.76. Bertha Taylor was appointed interim clerk until August 15, 2006, when she was certified as the winner of the August general election. The state recommends the county take steps to recover the funds from the estate. Carroll County Mayor Kenny McBride said the Budget Committee will review the overpayment and make a recommendation to the County Commission.

Finding No. 2 – General Fund expenditures exceeded budgetary appropriations by $5,565. McBride responded that the Drug Court revenues in the General Fund should have been set up as a payable at the end of the fiscal year.

Finding No. 3 – Carroll County Highway Department does not maintain a system to account for materials used on some types of road projects. The Department maintains a system to account for bridge lumber, culverts, and rock for state-aid projects; however, it does not have a system to account for materials used on other types of road projects, which increases the possibility of risk of inventory loss.

Finding No. 4 – The Carroll County Sheriff’s Department contracted with Securus Technologies for an inmate telephone service, in which the department receives 28 percent of the gross revenue billed for all phones. The department received a signing bonus of $20,000, which was escrowed in November 2005. As reported in the prior year’s report, commissions of $14,607 were deposited into this account from October 2005 through November 2006 and invoices totaling $24,996.34 were paid during this period. Additionally, from December 2006 through October 2007, the account earned commissions of $13,641.08 and the company paid invoices for the Sheriff’s Department totaling $632.32. The balance in the escrow account on October 31, 2007 was $22,620.01. Invoices paid by Securus Technologies on behalf of the Sheriff’s Department from December 2006 through October 2007 include: Gulf State Distributors - $399.32 for twelve 15-foot cartridges, four 21-foot cartridges, and four DPM batteries. Gall’s was paid $233 for a cross-draw vest with utility pouch, two camouflage jackets, and two pairs of camouflage pants.

The comptroller listed these deficiencies: The contract with Securus Technologies was not approved by the County Commission; (b) From October 2005 through October 2007, at the direction of Sheriff Bartholomew, Securus Technologies used proceeds from the county’s telephone commissions and signing bonus to purchase items totaling $25,628.64 for the Sheriff’s Department. These funds were not appropriated by the County Commission and were therefore not expended in compliance with Section 5-9-401 of the Tennessee Code Annotated; (c) The office did not remit the revenues earned from its jail telephone operations to the county. The State Attorney General opined in November 1989 that revenues earned from telephone operations are local revenues and should be administered as any other local revenue; (d) All contracts should be entered into in accordance with state statutes. All purchases for the Sheriff’s Department should be made by the county through the county’s General Fund. Furthermore, all operating expenses of the office should be appropriated by the County Commission and paid through the budgetary process and revenues generated from the operation of the jail telephone system should be remitted to the county on a monthly basis.

The county did not respond to Finding No. 4.

Finding No. 5 – Duties were not segregated adequately in the offices of director of schools, circuit, general sessions, and juvenile courts clerks, clerk and master, register, and sheriff. The audit indicates officials and employees responsible for maintaining the accounting records in these officers were also involved in receipting, depositing, and/or disbursing funds. In the office of director of schools, the bookkeeper reconciled cash balances with the trustee, issued purchase orders, entered invoices into the computer system, and generated warrants. “We realize that due to limited resources and personnel, management may not be able to properly segregate duties among employees. However, our professional standards require that we bring this matter to the reader’s attention in this report,” wrote the comptroller.

Finding No. 6 – A central system of accounting, budgeting, and purchasing has not been adopted. Establishing a central system would significantly improve internal control over the accounting, budgeting, and purchasing processes. County officials should consider adopting the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting and purchasing covering all county departments.

The county had $11,016,601 in revenues for the fiscal year. Salaries for office holders for that year include: county mayor, $74,759; road supervisors, $30,675 each for four supervisors; director of schools $67,118; trustee $56,069; assessor of property $56,069; county clerk $56,069; circuit court clerk $49,889; clerk and master $64,021; register $56,069; and sheriff $62,276.

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March 25, 2008