Comptroller’s Office releases annual financial report for year ending June 2021
Published 3:08 pm Monday, March 28, 2022
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BY IVAN SANDERS
STAR STAFF
Carter County Mayor Patty Woodby said the recently released state auditor’s report could have been “much worse” due to staff transitions.
Seven findings were reported in the Tennessee Comptroller’s Office audit of Carter County for the fiscal year ending June 30, 2021.
“Under the circumstances, I thought the report would have been a hundred times worse because of the timing of the transition and everything else going on,” Woody said, referencing the departure of Brad Burke as finance director and the hiring of Carolyn Watson in April of 2021.
Along with the findings, recommendations were provided which were reviewed with Carter County management. The following are summaries of the audit findings:
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Carter County officials were not paid in compliance with state statute. As noted in prior years’ reports, certain former county officials were overpaid for the fiscal year ended June 30, 2019, which resulted in subsequent county officials being underpaid. The county commission voted to forgive the excess amounts paid to the two former officials and authorized additional payments to the then-current county mayor and current register of deeds, which were paid in September 2019. The action taken by the county commission by approving the overpayment appears to violate Section 8-24-102 Tennessee Code Annotated (TCA), since salaries of other county officials were not adjusted proportionately.
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Carter County did not obtain a current actuarial valuation for other post-employment benefits in a timely manner. Carter County did not obtain an actuarial valuation for the measurement and recognition of other post-employment benefits (OPEB) in a timely manner. This data is necessary for the preparation of government-wide financial statements and note disclosures as required by Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions.
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The county had deficiencies in budget operations. The deficiencies existed due to a lack of management oversight and management’s failure to hold spending to the limits authorized by the county commission. Some of these deficiencies have been reported in previous audit reports. Management has provided written responses and corrective action plans to address these deficiencies; however, these deficiencies continue to exist.
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Some invoices were not paid timely. Our examination revealed late charges were assessed and paid in 10 instances totaling $204. These late charges were assessed because the invoices were not being approved and provided to the finance department timely. The payment of late charges increases the costs of goods and services and results in the unnecessary expenditure of county funds.
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An investigation of the Carter County Head Start program disclosed misappropriation of funds and questionable disbursements. The former employee had been found guilty of theft and is awaiting sentencing in June.
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Fund balance reserve amounts were not calculated in the General Purpose School and School Federal Projects fund. Restricted, committed, and assigned fund balance amounts were reflected in the accounting records of the General Purpose School and School Federal Projects funds; however, these balances had not been updated since June 30, 2020. Auditors used alternate methods to determine amounts that should have been recognized for restricted, committed, and assigned fund balances in the financial statements of this report.
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The sheriff did not obtain a letter of agreement or court degree to authorize deputy hires. The sheriff did not obtain a letter of agreement or file suit in Circuit Court to authorize the number and salaries of his deputies. Section 8-20-101, Tennessee Code Annotated, requires the sheriff to enter into a letter of agreement with the county mayor concerning the number and the salaries of deputies or to file suit in Circuit Court. This noncompliance is the result of management’s decision based on the sheriff’s interpretation that the statute does not require him to obtain a letter of agreement or file suit in Circuit Court.
The report also included the demographics for Carter County for the fiscal year 2021.
Revenues for the county were at $92 million while the county’s debt was $16 million. The county had $85 million in expenditures. Average debt by capita stood at $280. The population of Carter County provided by the 2020 Census was 56,400. There are three active certified county financial officers.
Watson said some of the findings actually came from a couple of years ago.
“Most of these are already fixed,” said Watson. “The stuff with overspending the budgets is currently being worked on. I had started even before she told me it was going to be an audit adjustment because I don’t like seeing negative numbers. The one about the salaries I have to do some homework on, but I am going to get that taken care of before the end of this fiscal year. We have gone through and analyzed all the fund balances for the county and the late invoices — the only thing I can do about it is to nicely say please don’t do that again. Will it be better next year? I certainly hope so because I have fixed everything they have found. The goal is not to have any findings.”
A full report can be viewed online by visiting https://comptroller.tn.gov/content/dam/cot/la/documents/county/2021/FY21CarterAFR.pdf.
