The 2012 Unicoi County audit ending June 30 returned findings among the assessors office, sheriffs department, mayor office, superintendent of roads and the office of clerk and master, according to the Tennessee Comptroller of the Treasury audit report released on Oct. 26.
Unicoi County Mayor Greg Lynch said he was pleased with the audit overall.
Im pleased with the audit overall from our offices standpoint, Lynch said. Theres no glaring problems at this point and our audits have gotten progressively better. Overall I think it shows good stewardship of the countys finances.
It was found that offices of the county mayor and sheriffs department, the audit states, did not solicit bids for perishable food commodities. State law requires items totaling more than $10,000 must go through a bid process.
However, Section 5-14-204, TCA, provides that the governing bodies may exempt perishable commodities from bid requirements, audit states. The County Commission has not formally approved the exemption of perishable commodities from bid requirements.
The county road department was cited in the audit for exceeding the maximum accrued vacation leave balance allowed by the personnel policy.
Accrued leave was maintained manually instead of through the computerized payroll system, and unused balances were not calculated until the end of the fiscal year, the audit states. Allowing employees to accrue leave balances exceeding five days violates the countys personnel policy.
Last years audit returned the same finding of duties not being equally segregated in the office of clerk and master.
This lack of segregation of duties is the result of managements decisions based on the availability of financial resources and is a significant deficiency in internal controls that increases the risk of unauthorized transactions, the audit states. Also, this deficiency is the result of managements failure to correct the finding noted in the prior-year audit report.
Deficiencies in reporting employee leave at the sheriffs department were found by the audit.
A response from Unicoi County Sheriff Mike Hensley was included in the audit.
I was appointed sheriff by the Unicoi County Commission in March 2012 after the resignation of the former sheriff, the audit states. Since that time, I have reviewed and changed the way we conduct business.
The response explained an initiative to stop the amount of leave being accrued and to start having officers use accrued vacation or overtime.
We went from 12-hour shifts to eight-hour shifts, the audit states. Therefore, there are no more seven-day breaks. Now, when employees earn a vacation day, they take it instead of carrying it over to next year. All vacations must be taken within the fiscal year. All holidays are now taken within the two-week pay period.
The audit also found that the assessors office did not prorate new construction.
Section 67-5-603, Tennessee Code Annotated, provides that for the year in which an improvement or building is completed, the assessment, or increase in assessment, shall be prorated for the portion of the year following the date of its completion, the audit states. This deficiency can be attributed to the lack of management oversight resulting in new construction not being properly assessed and the potential loss of county tax revenue.
A response in the audit from the assessors office states software systems in Unicoi County are not equipped with a function to calculate proration. In regard to the audit done, we are not actually on the State of Tennessee computer system, the audit states. The state system is called CAAS III and CAAS IV. Their system is actually set up to do the proration by computer.
The system we have doesnt have an option for proration, so when we pick up new construction, we try to use a manual depreciation factor to adjust for proration and postpone putting the whole value on the home until the next year.
The audit concluded the situation will need to be monitored in the future.
The assessor of property was unable to provide any records demonstrating that proration procedure of value was being followed as required by state statute, the audit states. This issue has been addressed with the assessor in the past and will be monitored in the future.
The audit also makes two suggestions in the best practices portion of the document. The audit suggests the county needs to implement a central system of accounting, budgeting and purchasing.
The absence of a central system of accounting, budgeting, and purchasing has been a management decision by the County Commission resulting in decentralization and some duplication of effort, the audit states. We recommend the adoption of the County Financial Management System of 1981 or a private act, which would provide for a central system of accounting, budgeting, and purchasing covering all county departments.
The suggests that the county should also implement an audit committee.
Unicoi County does not have an Audit Committee. An Audit Committee can assist the County Commission by providing independent and objective reviews of the financial reporting process, internal controls, the audit function, and being responsible for monitoring managements plans to address various risks, the audit states. County officials should establish an Audit Committee as a best practice.
To view the full audit online go to http://www.comptroller.tn.gov/repository/CA/2012/UnicoiAFR.pdf.
By Kayla Carter