Carter County Sheriff Dexter Lunceford informed members of the county’s Financial Management Committee that state officials have decided not to pursue charges against his predecessor following an investigation into the accounting practices of the previous sheriff.
During the committee’s meeting Wednesday morning, Lunceford asked to speak in order to provide committee members with an update on the investigation into former-Sheriff Chris Mathes, whose term in office ended on August 31, 2014.
Lunceford first briefed the committee regarding how the investigation began, noting it started following auditor findings by the Tennessee Comptroller’s Office.
“They found several improprieties that had taken place under the previous administration,” Lunceford said.
In September 2014, the Comptroller’s Office received a fraud complaint regarding the discovery of a privately held bank account that contained funds used to purchase items or services for the Carter County Sheriff’s Office. In November 2014, the Comptroller’s Office released a report that questioned nearly $76,000 in expenditures by the Sheriff’s Office and accounting practices used by the Mathes administration. Local and state officials said they did not know those expenditures were being made or that the separate account existed.
The report said Mathes received funds from Tennessee Business Enterprises — the company that operated the Carter County Detention Center inmate commissary program — and never reported the receipt of those funds to local or state officials.
According to the audit, the funds the Sheriff’s Office received from TBE were held in a separate account and maintained by the TBE. Mathes would then request items or services and the TBE manager would write a check to make the purchase.
The audit report detailed an agreement between Mathes and TBE regarding the operation of the commissary program which included a provision for the TBE manager to make contributions to the Sheriff’s Office.
“The manager will voluntarily contribute up to $12,000 annually,” the audit report quotes the agreement as saying. “Donations will not be in cash but will be in the form of free goods and services. If the sheriff determines a specific need, he can advise the commissary manager, and arrangements will be made for the commissary manager to purchase the item(s) provided the cost does not exceed the annual contribution.”
According to the audit report, between August 11, 2009, and August 12, 2014, the TBE manager disbursed approximately $75,847 at the discretion of Sheriff’s Office personnel. Those disbursements consisted of equipment purchases, cable television services, postal charges, flowers, training and scholarships and donations to various churches, schools and civic organizations. The report also noted the disbursed funds were used to give a $2,300 to a Sheriff’s Office employee and in his response to the auditor’s findings Mathes said that payment was a bonus given at the suggestion of the TBE manager.
In his response to the initial auditor’s report, Mathes said no fraud occurred and the contributions were voluntarily made at the discretion of the TBE manager. He further said that neither he nor any of his employees had direct access to those funds at any time.
Following the findings by the Comptroller’s Office, Lunceford said he and his staff then began to look into the department’s accounts.
“We did a little looking and turned what we found over to the District Attorney’s Office and the Comptroller’s Office, which we are required to do by law,” Lunceford said on Wednesday.
In January 2015, Lunceford said he and his staff had found another questionable account from the Mathes administration. At that time, Lunceford said the account was a calendar fund and contained between $6,000 and $7,000 that had not been properly received by the Trustee’s Office.
Lunceford said the investigation into the accounting practices was ultimately turned over to the Tennessee Bureau of Investigation along with the Sullivan County District Attorney’s Office.
The investigation conducted by the TBI lasted 16 months, Lunceford informed the committee on Wednesday.
“It’s done and completed,” Lunceford said. “They did find several things but they refused to indict the former sheriff.”
Lunceford said he was working on a detailed report documenting the findings of the TBI investigation, the Comptroller’s audit and his department’s findings. He said the report would be “factual” and would not contain any “speculation” as to what did or did not occur.
“The report will also detail what we have done in response,” Lunceford said, adding his administration has worked to put procedures in place that would prevent similar incidents from occurring.