EDITOR'S NOTE: The Cannon County Audit Committee recently met with the staffs of various county offices to review the findings in the 2010-2011 state audit. Following is a report of their work.
The newly-formed Audit Committee of Cannon County consists of Chairperson Glenn Steakley, Secretary Hope Tenpenny, Ed Sissom, Pat Sissom, and Gary Hancock. Their mission is to provide independent review and oversight of the county's internal controls. After reviewing all audit findings and meeting with all parties involved, the Audit Committee will present their report and recommendations to the County Commission. There are currently eight counties in the 23-county mideast district of Tennessee that have audit committees.
On April 12th, the Audit Committee met privately with the auditing team who conducted our county audit to determine whether or not the auditors were independent and unbiased toward the county and its officials.
Chairperson Steakley pointed out that there were several positive points made by the auditor. The auditor was pleased that the county had formed and was supportive of an audit committee. Also, of the findings, there were none that could not be corrected within a week and some had already been corrected.
The Audit Committee met with County Executive Mike Gannon and his assistant, Diane Hickman, on May 3. One finding discussed was that not all county employees were required to participate in the Tennessee Consolidated Retirement System. Gannon stated that he did not previously realize that it was a requirement, and at this time everyone, with the exception of the Election Office, has complied with the requirement. It is believed the Election Office will be including it in their proposed budget, thus correcting this audit finding completely.
Other findings discussed included Solid Waste expenditures which exceeded appropriations that had been approved by commissioners, failure to require purchase orders for amounts exceeding $100, lack of communication of purchased assets by the Highway Department being disclosed to the county executive office, and expenditures exceeding appropriations in the following funds: Jail, Other public safety, Dental and Health for REACH, Other public health and welfare for REACH, and other debt services.
Gannon stated that Other Public Safety was the only large one, in the amount of $21,000, and that the money was there and a budget amendment was not done in time as it should have been. It was discussed that bills sometimes come in late, such as with the Solid Waste, causing a shortage. The solution was to be more vigilant about getting budget amendments done in time to solve the problem.
Other remedies for the findings were discussed and will be implemented right away. Notices will be sent to vendors and departments that all bills need to be turned into the county executive office in a timely manner before the end of the fiscal year. Purchase Orders will be enforced for any amount over $100.
REACH now has their own banki account. All deposits will go into this account, and the only check written out of it will be at the end of the month to empty the account. It will be made out to the County Trustee and must be signed by both the REACH Director and the County Executive.
Solid Waste will be bid out from now on. Nothing placed into a dumpster within the fenced area of the Convenience Center is to be removed and sold or scrapped for personal gain.
County commissioners have officially acknowledged the change in personnel policy regarding no post-employment insurance. This policy has been in affect, but not officially changed. This takes care of that audit finding.
The Audit Committee finished this meeting by discussing ways to make sure the public was informed about the toll-free number to call in order to anonymously report suspected cases of fraud.
• The Audit Committee met again on Thursday, May 10th with various department heads to discuss audit findings.
Debbie Morris, Register of Deeds, was the first person scheduled. (The Audit Committee had scheduled each session 20 minutes apart, which proved to work very well.) As each official sat down for his or her meeting with the committee, Chairperson Steakley explained the objective of the Audit Committee, their desire to assist the officials in any way possible, and the positive points brought up by the county auditor about the Cannon County finances.
The finding concerning the Register of Deeds office was that multiple employees are operating out of the same cash drawer. The office only has two employees, including Debbie herself. At the suggestion of committee member Pat Sissom, it was decided that instead of using one money bag, Morris and her assistant will each have her own money bag to conduct business out of during the day. Each will be totaled separately at the end of the day, then added together and deposited as normal. It is believed that this will correct the finding regarding her office. Morris expressed that she wished the auditor had simply suggested this to her, to which the committee members agreed.
After Morris left the meeting, it was discussed among committee members that it would be helpful if county auditors would offer suggestions for fixing findings rather than simply pointing out the problems.
County Clerk Bobby Smith had the same audit finding as Morris. His office employees three full-time workers including himself, along with one part-time worker. Smith stated there simply is not room for multiple drawers. He mentioned that a couple of years ago the State had started a solution for this named "TRUST," which was overseen by Billy Trout, but all he had received was one register (or box) and nothing since then. In the many years Smith has headed the County Clerk office, he has continued to work out of the drawer he currently uses. Audit Committee members stated they will look into ''TRUST" and see what they can find out. When asked what he thought would help to clear up the finding, Smith simply said he needed more room.
Smith was asked, as was each person the Audit Committee met with, to write up a report stating what corrective action their office was taking and to return it to the committee as documentation.
Next to arrive was Bill Bryson from the Clerk and Master office, which employees himself and one other person. Bryson had been aware that backup tapes from the computers needed to be taken and stored off-site weekly, thus causing the auditor to write up his department for Deficiency in non-compliant computers. He has already corrected the problem and even presented the committee with a written report documenting the steps taken.
Lynn Foster with Circuit Court and General Sessions Court had two findings on the report. The first was that the office did not issue pre-numbered receipts. Foster said she currently has 500-1000 receipts left, which will last for approximately six months. Her computer numbers the receipts and steps have been taken to make sure the numbers can not be changed. The decision was made to check with Diane Hickman about the cost of the receipts and to decide if it would be more cost-effective to continue using the remaining receipts till they are all gone, or better to just dispose of them and order pre-numbered ones now in order to correct the audit finding.
The second finding was "multiple employees using same cash drawer." There are five people including Mrs. Foster, and money must be kept separate for Circuit Court and General Sessions. Due to this dilemma, Foster is going to speak with the auditor about the best way to handle it. Many ideas were discussed, but the committee is going to wait to see what the auditor suggests.
Darrell Young stated and provided documentation that he had already corrected the audit finding at the jail of duties not segregated adequately. All monies received will be either money orders, cashier checks, or personal checks. No cash will be handled. Young will initial and sign off on all monthly balances and bank statements, along with all bank deposits.
Ricky Cope of the Ambulance Service believes his finding of duties not segregated adequately was derived from the fact that he does not have, nor does he feel he needs, a secretary. Billing is now done by a private billing company, taking much of the burden off of Cope. To correct the finding by the auditor, Cope says both he and the county executive will sign all receipts for now on.
The Road Department's Wayne Hancock was the last meeting of the night. His first audit finding, material audit adjustments problems, simply came down to the fact that a piece of machinery had been purchased by the highway department but no record of it was in the files of the county executive office. The solution agreed upon was to have Hancock's secretary write up a procedure for better communicating these things to Hickman at the county office. Deficiencies in operations causing the amount spent by the road department to exceed the amount appropriated can be easily fixed by budget amendments when it is noticed that the money allotted for materials or repairs is going to be insufficient because of an unforeseen event.
The final finding of duties not segregated adequately was a mystery, as neither Hancock nor any of the committee members could fathom why he would need more than one office assistant. Glenn Steakley stated he would attempt to find out what the auditor meant and what she suggests as a corrective avenue.
At the conclusion of the meeting, Steakley brought forth four signs to be displayed in public locations. These signs inform the citizens about the toll-free number used for reporting suspected fraud abuse. The committee discussed where these signs would be placed and in what media they would advertise the information. Glenn Steakley will contact the members of the committee when he has received all of the reports so that they can set up their next meeting.