County audit reveals need for improvement

By Lesley Jenkins
star staff

An audit of Carter County and the Carter County School System by the State of Tennessee, Comptroller of the Treasury, reported problems in several areas.
   The most notable discrepancies were falsified time records of a sick teacher, inadequate control of cash collections in the County Clerk's office, poorly presented government-wide financial statements, and inconsistent receipts for landfill convenience centers.
   Jason Cody, the county's finance director said, "With any audit, there are always some findings" adding that the problems would be "used for improvements."
   The report states, "Carter County school officials informed us of an internal investigation they had conducted regarding a Transportation Department employee who was paid for hours she did not work. Based on their investigation, school officials concluded that an employee was paid for 86 work days between August 2002 and January 2003 when she was actually absent from work due to an illness."
   Time sheets submitted to the payroll clerk reflected the employee had worked days when she was absent. "The time sheets were signed by the Transportation Supervisor, and the employee's name was signed by another Transportation Department employee, along with the employee's initials," the report states.
   The employee resigned Jan. 31, 2003, due to her illness. Nine employees transferred sick days to the sick employee to make up for the days that she was paid for but did not work, based on an existing policy of the school system.
   Cody said the case was someone "trying to do the right thing but went about it in the wrong process." In future cases of extended illnesses, Human Resources and the Personnel Department will meet with a sick employee to discuss options for sick leave, disability, or family medical leave.
   "We are definitely aware and we are reviewing the time sheets more closely and trying to ensure it doesn't happen again," Cody said.
   Director of Schools Dallas Williams was not available for comment on Wednesday.
   Deficiencies in cash collections at the County Clerks office were also noted because the daily cash book did not match receipt numbers for collections and deposits. The method of payment, i.e. cash or check, was not specified on some receipts.
   The report also states, "Official, prenumbered receipts were not issued for marriage licenses, copy fees, interest earned on checking and trust accounts, and in several instances, probate collections. Section 9-2-104, Tennessee Code Annotated requires that official, prenumbered receipts be issued for all collections."
   Cody said an updated software system was put in place in December 2003 to correct the problems. "We are addressing it through technology. We have built into the software pop-up screens asking the payment type, such as cash or check." He added that because of the volume of work the clerk's office handles, "it doesn't work well manually."
   The audit also reported that the county and the school system were unable to "provide the information necessary to prepare government-wide financial statements for all of their activities, as required by the Governmental Accounting Standards Board Statement No. 34." GASB is the accounting standard that local and state governments are required to follow.
   A response from Cody in the report says, "I believe it would be easier to implement GASB 34 after the county's accounting functions are centralized. Furthermore, we can gain valuable insight from the counties that just recently implemented GASB 34 in the East Tennessee region."
   Cody said GASB 34 attempts to make government financial statements similar to a statement from a corporation and said in many instances fully implementing GASB 34 can take "several years."
   "Actually, just a handful of East Tennessee counties have implemented GASB 34," Cody said.
   Two local convenience centers for the landfill were cited for not writing receipts for all collections, but only at customer requests.
   Cody said, "Historically this has been a problem. The problem we have is there is only one person who works in those places. Anytime you have one person working it is not a good situation. A lot of it has to do with the one person doing other things and trying to collect money at the same time."
   Cody said he is working on two possibilities to stop the handling of cash at the convenience centers. One option is to sell coupon booklets from local vendors. The convenience center would accept the coupons as the form of payment instead of cash.
   The other solution would be to add 1 cent onto property tax rates. This option would allow customers to use the convenience centers at will, because the cost would come from the penny increase.