Tennessee Comptroller’s Office reports findings in four county offices
The Division of Local Government Audit has released the annual financial report for Grundy County, for the year ending June 30, 2018. Findings included deficiencies in the offices of County Mayor, Highway Superintendent, Director of Schools, Trustee, and Register of Deeds. The Grundy County Sheriff’s Office had no audit findings for 2018.
The deficiencies for offices with findings were presented to each county official, along with recommendations to correct the problems. Findings within the Highway Department and Office of the Director of Schools fell under previous administrations. In addition, as the audit runs from July 31 to June 30 of each year, several findings from the 2017 audit were corrected as early as August of last year but show up on the 2018 audit report.
Office of County Mayor
All eligible employees do not participate in the Tennessee Consolidated Retirement System
The Comptroller’s Office chose a random sample of 16 full-time employees from the county’s employment roster. This testing revealed eight full-time employees of Grundy County were eligible for participation but were not participating in the Tennessee Consolidated Retirement System (TCRS). The Tennessee Code Annotated (TCA), requires mandatory participation in the TCRS for all employees of participating employers after a probationary period.
In the prior year, the same deficiency was discovered, and county officials stated that they were unaware that participation in TCRS was mandatory; therefore, employees of the county have now been given the option of participating.
Grundy County Mayor Michael Brady responded that this has been corrected for the current fiscal year.
“Grundy County received an audit finding, cited as a repeat finding, for eligible employees not participating in TCRS,” stated Mayor Brady. “We learned of this issue last year, but we were unable to correct it because of budgetary constraints. We addressed the issue in the creation of the 2018-2019 FY budget and have corrected the issue with all eligible employees participating in TCRS.”
Office of Highway Superintendent
Highway Department not properly reimbursed for work performed for other governmental entities
During the year, the Highway Department per-formed road repairs for the cities of Monteagle and Tracy City; however, the Highway Department was reimbursed only the costs of the materials used on the city projects. TCA provides that the County Commission has the authority to authorize the Highway Department to perform work for other governmental entities; provided, the costs of the projects so authorized is reimbursed to the High-way Department. Without charging the cities for the Highway Department’s costs of providing labor and equipment, the department is not recovering its actual costs.
Some budget amendments were posted in the Highway/Public Works Fund that were not approved by the County Commission
Some budget amendments were posted in the Highway/Public Works Fund that were not approved by the county commission. Accurate budgetary statements are necessary to provide county officials and departments with available spending limits.
Several deficiencies were reported at the Grundy County Highway Department
On August 23, 2018, the Comptroller’s Division of Investigations issued an investigative report on the Grundy County Highway Department. This report disclosed that the Highway Department performed work on some private properties and cemeteries, maintained a portion of a private road for a department employee, and allowed employees to work on personal vehicles in the Highway Department garage during work hours.
Highway superintendent Johnny Ray Fults addressed the audit’s findings with the Herald.
“In regards to the recent Audit for the fiscal year of July 2017-June 2018, we were made aware of several deficiencies in the Highway Department,” explained Fults.
“Since we have taken office, we have a good working relationship with the cities, the Board of Education, the County Mayor, and the County Commission. Any and all budget amendments, if required, are presented to and approved by the County Commission prior to any adjustments
“We are working with other government entities that currently have an outstanding balance with the Highway Department to substantiate a repayment plan. In addition, we require written request for any worked performed and have signed inter-local agreements for the repayment of any work performed.
“Our goal is to operate and maintain the office of the Grundy County Highway Department to the standards required, expected, and due to you, the residents of this county,” concluded Fults.
Office of Director of Schools
The School Department was assessed a penalty of $34,060 by the Internal Revenue Service for non-compliance with the Affordable Care Act
During the year, the School Department paid a penalty of $34,060 to the Internal Revenue Service for failure to comply with the Affordable Care Act for the 2015 fiscal year. The School Department provides health insurance coverage to its employees; however, this coverage was not in compliance with federal regulations for certain employees.
Director of Schools Glenda Dykes says the cost to cover some classes of employees is prohibitive to the employees themselves and this will be an ongoing finding.
“There is no way to offer affordable insurance to employees such as para-professionals, contract employees, mechanics, and cafeteria workers under the Affordable Care Act,” explained Dykes. “The premium they would pay under insurance through the school system is higher than what these employees make.
“The Grundy County Board of Education would like to correct this deficiency. However, because of financial restraints we are unable to do so at this time.”
The School Department had budget deficiencies
The auditor noted the following deficiencies in the budget operations of the School Department:
1. Expenditures exceeded appropriations by $5,999 in the Career and Technical Education Program major appropriation category (the legal level of control) of the General Purpose School Fund.
2. Expenditures in several salary accounts exceeded line-item appropriations in the General Purpose School and School Federal Projects funds by amounts ranging from $1 to $9,638.
3. Budget amendments for the month of June were not approved by the county commission. Accurate budgetary statements are necessary to provide county officials and departments with available spending limits. Tennessee Code Annotated, states that “All funds from whatever source derived, including, but not limited to, taxes, county aid funds, federal funds, and fines, that are to be used in the operation and respective programs for the various county departments, commissions, institutions, boards, offices, and agencies of county governments shall be appropriated to such use by the county legislative bodies.” Also, the budget resolution approved by the county commission states that “the salary, wages, or remuneration of each officer, employee, or agent of the county shall not be in excess of the amounts set forth in the estimate of expenditures that accompanies this resolution.” Therefore, the salaries that exceeded line-item appropriations were expenditures not approved by the county commission. These deficiencies exist because management failed to hold spending to the limits authorized by the county commission and board of education, which resulted in unauthorized expenditures, management’s failure to correct the finding noted in the prior-year audit report, and management’s failure to implement their corrective action plan.
Dykes explained to the auditor that these deficiencies had not been corrected the prior year because of a different Director of Schools and financial manager.
Office of the Trustee
Monthly reports of taxes collected were not made on or before the tenth of the following month; the office did not review software logs
The trustee did not provide the county mayor with reports of taxes collected by the tenth day of the month as required by state statute. During the year examined, all monthly reports of taxes collected by the trustee were issued from 12 to 61 days after the tenth day of the month.
Grundy County Trustee Tyler McCullough states the issue began in the previous fiscal year
“When I began using a new vendor to process the credit card payments we began to see this issue,” said McCullough.
“It is important to note that the audit runs from July 1 to June 30,” explained McCullough. “So, this finding reflects problems that were uncovered and fixed by August 2018.
“Trustee’s Office worked diligently to correct the issue with the vendors processing information. I spoke with the Comptroller’s Office in an attempt to receive advice on how to correct this matter. This issue began at the end of the previous fiscal year and carried into the next fiscal year to correct this issue.”
Office of Register of Deeds
A username and password were shared by two employees of the office
Because an employee had not been assigned a unique username and password, work was performed using another employee’s account. If inappropriate activity were to occur, the employee responsible for this activity would not be easily identified because employees shared accounts. After this was brought to management’s attention in April 2018, all users were assigned unique usernames and passwords.