As one of its first tasks, the new Hamilton County Audit Committee said it will hold County Auditor Chris McCollough accountable to untangle a web of unaccrued paid time off in the county’s criminal court offices.
This deficiency in the criminal court offices is without a paper trail but was identified by an external audit of fiscal year 2023, which was summarized for the committee at its first meeting Thursday.
James Bence of Mauldin & Jenkins CPAs and advisors said that some criminal court office employees may have been absent with pay as often as every other Friday “several years” ago. Mr. Bence’s team estimated a range of days absent with pay using information from verbal interviews.
“The paper trail didn’t really exist,” Mr. Bence said. “It’s by memory because there’s no paper trail.”
Mr. McCollough and county management have six months under the new audit committee’s policy to rectify the situation. The old policy had no deadline.
The committee will call a special meeting to officially adopt its new policy.
The criminal court offices only began using the county-wide timekeeping software in January, it was stated. Mr. McCollough said that pinpointing true paid time off accrual in the old system, retroactively, will be hard.
Because this deficiency has no records, an unmodified opinion of the county’s records for fiscal year 2023 is that they are materially correct as presented, said Mr. Bence.
Criminal Court Clerk Vince Dean said, "When the inefficiencies and discrepancies were reported to our office in January, we immediately instituted the county’s “Time Keeper System.” Discrepancies were found in our compensatory time keeping and that has been corrected. There is now a paper trail in place.
"There was never any accusation of fraudulent or illegal activity. Our office was forthcoming and cooperative with the county auditors at that time and we remain so. We are eager to assist in any way."
Mr. McCollough told the committee he is compiling the county’s annual internal audit, due in September.
But he said his team is hitting road blocks while gathering data for gasoline expenses for county employees. Questions hover around premium gas charges where low-grade fuel is required by the county, and around Visa procurement card (p-card) gas purchases where a fuel card should have been used. Fuel cards automatically exempt the county from state and federal taxes.
Mr. McCollough said that gas stations are not reporting county purchases correctly.
County Commission Chairman Jeff Eversole also expressed concern that personal use of county cars is termed a benefit by the IRS, so tighter record-keeping is imperative to keep surprises away, he said.
Mr. McCollough said the current internal audit scrutinizes fuel purchases as well as grant compliance, hotel-motel tax, ARPA funds, internal controls, travel and discretionary funds of supporting agencies, a cell phone cost analysis and prison inmate costs, he said.
In the coming months, Mr. Bence will walk the committee and county management through new accounting standards in recording, which will take effect over the next two years. He said the changes are “favorable for local governments,” touching on correct use in lease contracts, and on physical assets and liabilities, such as software and IT systems the government may use but not own.
He praised the county for its unassigned fund balance, which he said may help soften the blow as sales tax revenue, which has spiked in recent years, begins to fall again.
The five-member committee elected Amie Haun as chairwoman, David Kukura as vice chairman and Jim Harris as secretary.
Also serving on the committee are Hamilton County Commissioner Chip Baker and Bernard Harris. The committee meets quarterly. Its next scheduled meeting is in November.
Better Tiplines
With some digging, the county’s website offers a spot to report an “audit concern.” The audit committee voted in favor of a facelift to change tipline wording to “fraud, waste and abuse,” add colors, large fonts and an emblem, and place the tipline at the bottom of every page on the county’s website.
“Something to make it stand out a little bit more,” said Chairwoman Haun, who added that tiplines uncover fraud more than internal or external audits. She said new tipline reporting software would alert county and state officials and the committee of a tip immediately.
The audit committee established its charge to:
- 1-Address practices, policies and procedures within county government for addressing the following:
- a-Financial reporting
- b-Risk management and internal controls
- c-Information technology and security
- d-Financial compliance with laws and regulations
- e-Financial and other banking practices
- f-Ethics policies
- g-Internal audit
- 2-To establish a policy and procedure of confidential reporting of suspected illegal, improper, wasteful, or fraudulent activities by county officials and/or employees
- 3-To annually present not less than 30 days prior to the County Commission’s consideration of the county’s upcoming fiscal year budget a written committee report detailing how it has discharged its duties and any committee recommendations to the full County Commission
- 4-To possess such other duties, responsibilities, and privileges as authorized by the laws of the State of Tennessee.