Two findings reported from Chester County Audit

Recently, the Tennessee Comptroller’s Office released the audit reports for the majority of counties in Tennessee.
Tennessee Comptroller of the Treasury, Jason Mumpower, announced 12 of the 91 counties that were audited by the Comptroller’s Division of Local Government each received a clean audit report for the fiscal year ending June 30, 2021.
The 12 counties are Blount, Coffee, Cumberland, Gibson, Giles, Hamblen, Henderson, Lauderdale, Loudon, Marion, Roane and Robertson.
The annual audits for these counties were completed without any findings. Audit findings are used to report on weaknesses, deficiencies, or areas of noncompliance within government operations.
The 91 Tennessee counties audited by the Comptroller’s Office received a total of 278 findings in fiscal year 2021. This represents an average of 3.05 findings per county. In fiscal year 2020, Tennessee counties received an average of 2.97 findings in their annual audit reports.
Chester County government had two findings in their audit.
The first finding was “appropriations exceeded estimated available funding in the solid waste/sanitation fund.”
The audit states, “The budget and subsequent amendments approved by the county commission for the Solid Waste/Sanitation Fund resulted in appropriations exceeding estimated available funding by $21,376. Sound budgetary principles dictate that appropriations should be held within estimated available funding. This deficiency was the result of a lack of management oversight.”
The state recommended Appropriations that exceed estimated available funding should not be submitted to the county commission, and the county commission should not approve such appropriations.
Mayor Barry Hutcherson and Budget Director Judy Benard’s response to the finding said, “We concur with this finding. The transfer overage of the Solid Waste/Sanitation Fund balance of $21,376 was the result of a transfer of $25,000 to cover dumping fees which should have been from the General Fund to the Solid Waste/Sanitation Fund. The county commission was aware of a possible shortage and agreed to transfer funds from the General Fund. I stated it incorrectly on the amendments. The expenditures for dumping fees increased astronomically due to residents being at home for COVID 19 creating more garbage. A solid waste fee has been put in place effective October 1, 2021, to produce revenue to help cover the expense of continually increasing prices of burying of garbage.”
The second finding was “the office had deficiencies in purchasing procedures.”
The audit said the following about the second finding.
“As part of our audit procedures for determining whether the purchasing process was operating as designed, we selected a sample of 60 disbursements totaling $501,995 from a population of 2,511 vendor checks totaling $5,727,931. Our examination revealed the following deficiencies, which are the result of a lack of management oversight and a lack of understanding of internal controls and sound business practices.”
“A. In three of 41 applicable instances, purchase orders were not issued, and in one of 41 applicable instances, a purchase order was issued after the purchase was made. Purchase orders are necessary to control who has purchasing authority for the county and to document purchasing commitments. The failure to issue purchase orders increases the risks of unauthorized purchases. The practice of issuing purchase orders after the purchase defeats the purpose of a purchase order and makes the purchase order an approval for payment rather than an approval of the purchase.”
“B. The county has adopted a travel policy governing employee business-related travel; however, in three of 14 applicable instances, employees were reimbursed for meals at a different rate than allowed by the policy, and in two of 14 applicable instances, the travel claim was not signed properly. The failure to follow the county’s travel policy increases the risks of unauthorized expenditures.”
“C. The county’s travel policy states that “mileage shall be computed to/from employee’s workstation or residence, whichever is shorter.” During the year, the maintenance supervisor (Ralph Bullman) filed 11 travel claims for 350 miles each, totaling $1,810, that were not based on actual miles. These travel claims were in addition to other travel claims that were supported by actual miles.”
The state’s recommendation said that “purchase orders should be issued for all applicable purchases before purchases are made to strengthen internal controls over purchasing procedures and to document purchasing commitments. County officials and employees should comply with the county travel policy when requesting reimbursements for travel related expenses. Reimbursements should not be made to employees who do not comply with established policy.”
Hutcherson and Benard’s response to the second finding was: “We concur with this finding. Management does understand internal controls and sound business practices. Monitoring and issuing purchase orders is an important process to operations. The problem is not a lack of understanding. It is having time, staff, and office space to perform duties of the office efficiently to the best of our ability. 192 A travel policy was placed into effect in January 2021. In the interim of the change, a few travel claims were paid at the previous rate. Once everyone understood the change, employees have abided by the new policy. In the case of the maintenance supervisor’s travel claims, the maintenance supervisor was hired 23 years ago. He was a licensed contractor with electrical, plumbing, etc. There was a verbal agreement between the mayor and the maintenance supervisor. He would use his personal vehicle and tools for county use. The county does not have a maintenance vehicle or tools. Reasoning 350 miles per month should cover expense of traveling daily from building to building, picking up parts locally, and he is on call 24/7. So, if something breaks at 1:00 a.m. at the jail, he comes back then. The mayor and budget director will address this to come up with an acceptable policy concerning the maintenance supervisor’s travel. The mayor and budget director will correct these deficiencies.”