New County Audit Committee Reviews Findings

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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.
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Members Opinions:
May 20, 2012 at 8:54am
So...., the objective of our local audit committee is to follow-up on the findings of the State Auditor? And this requires a committee of five individuals to see that corrective actions are carried out? And how does this committee interact with our current Budget Committee? And it was not possible the current Budget Committee could not oversee these suggested corrections?
May 20, 2012 at 1:03pm

The purpose or mission statement for the Budget Oversight Committee was in part, a request and resolution from the Cannon County Republican Party ( in order to address the reocurring annual Audit findings that have been reported here in the Cannon Courier and elsewhere.
Some of the comments following these articles, reveal skeptics and liberals who "poo pooed" the concept of such an objective Oversight Committee. Wisdom,Transparency and sincere desire to insure responsible stewardship of tax resources, with wise proven accounting procedures and practices ...... will benefit every Citizen of Cannon County.....even liberal skeptics!

Matt Studd
West Side Community
May 20, 2012 at 7:49pm
Bonnie the Budget Committee was reccommended by the State of Tennessee for several years prior to implementation.

As Matt stated, the CCRP pressed the idea with several commissioners to have it formed. It took awhile to get it approved and going, but it seems as if there is a very good group working hard to ensure money is being spent wisely and accounted for.

Its design is to be watchdog for any areas of concern. For example had this committee been formed when it was orignially asked for then there is a strong possibility that the REACH program would never have reached (pardon the pun) the point that it did. Unfortunately politics got in the way of forming the committee and mismanagement of that program got way out of control.

I think this was an excellent idea and one that was needed several years ago. I look forward to this group continuing to hold those who have control of our monies accountable.
May 21, 2012 at 8:02am
I agree with Corey this oversight committee should cure or at least curb some of the ills with the county's accounting.
May 21, 2012 at 6:02pm
Thanks for all the clarification. Maybe in the future this group will develop their own accounting review practices and be able to assist the county government in operating more efficiently throughout the 12 months of the year. Activity only as a result of State findings/recommendations would come only once per year.
May 23, 2012 at 9:50am
Mr. Studd, having made this comment above...."Wisdom,Transparency and sincere desire to insure responsible stewardship of tax resources, with wise proven accounting procedures and practices" ......please explain the new steps taken to employ such procedures and practices to the daily operation of county government and how they are separate and aside from those recommendations made by the State Comptroller's Office. Thank you.
May 23, 2012 at 3:26pm
@Bonnie, great question.
Those traits I cited and you quoted, are some examples of "essentials" that any oversight committee will have to have in order to have a meaningful impact or outcome, regarding their input, recommendations and their activities with the budgeting and accounting process.

Your question would be better ..... posed to the Chairman & full Committee, so that "they" could fully explain their MISSION STATEMENT and Operational Parameters.
I am hopeful that given the role they have played thus far, the recommendations made regarding Audit Findings..... our County should experience a SIGNIFICANT reduction of the "reoccuring" Audit Findings and yellow flags. Time will test ....and time will tell....the rest of the story.

Better management and controls of our tax dollars/resources, here in Cannon County or elsewhere, benefits everyone.... except the dishonest or the irresponsible..... as it will no longer be "business as usual" for them. While I have not yet seen a "Full Accounting" of the many yellow flags, or the total dollar figure of the Reach Program's errors or failures, I and others are hopeful that such patterns or abuses will cease.

This Oversight Committee should always be staffed with Citizens knowledgeable in Accounting, Budgeting and with very high integrity. It should never become one sided politically, or be infested with nepotism if this body is to be credible. Will our Citizens insist on such standards? .......I hope so!
May 23, 2012 at 7:49pm
Mr. Studd, Thank you. Such a committee then will be active throughout the year and not just after the State audit has been completed and submitted. To be effective, that would seem to be in order. Eliminating politics and nepotism may even lighten the burden on those who know they need to make changes but can't bring themselves to do it. Has the Audit Committee any authority to implement change or is their role more to highlight deficiencies and make them public?
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