audits

Prosecutor waits for comptroller audit of alleged ETSU racquet allegations

An East Tennessee State University internal audit has found that Yaser Zaatini, who resigned as tennis coach in March,  was involved in $106,000 worth of misdeeds and may have committed the crimes of theft, forgery and misconduct. But Washington County District Attorney is waiting for an audit by the state comptroller’s office before presenting the matter to a grand jury, reports the Johnson City Press.

 In his letter to ETSU President Brian Noland, obtained through a Tennessee Open Records request filed after his resignation was announced, Zaatini wrote “In conjunction with my resignation, I waive all annual leave accruals and have executed the enclosed promissory note promising to pay the university $31,293.13 consistent therewith. 

“In connection with this resignation I make no admission of malfeasance.”

…ETSU Board of Trustees member David Golden, head of the body’s Audit Committee, said the hall of fame coach was engaged in a “fairly sophisticated” scheme to falsify student-athletes’ signatures on meal expenditure forms and print phony receipts for restringing tennis racquets to be reimbursed for the costs. 

Tracing suspect transactions as far back as 2010, the university’s audit team estimated $85,674.61 in questionable expenses related to meal expenses, racquet stringing, registration fees and other expenditures. Auditors also tallied $20,747.63 in unreported annual leave they called into question. 

Even with the ETSU internal audit, Clark said if there were any charges, the state comptroller’s office would be the prosecuting agency, so he wanted to wait for that report before proceeding to the grand jury.

…“We want to make sure we have everything there might be before we move forward,” he said.

Nonprofit Mississippi River group dissolves after audit questions arise

A nonprofit group established protect and promote the Mississippi River in the stretch along Tennessee’s border has ceased operations after state auditors alleged improper bidding procedures in the design and construction of a $2 million visitors center, reports the Commercial Appeal.

The board of directors of the Mississippi River Corridor-Tennessee voted to dissolve because the Tennessee Department of Transportation terminated a contract with the group and quit paying invoices, said Diana Threadgill, president and executive director. “We just ran out of money,” she said.

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Comptroller catches government thieves in Claiborne, Fayette, Jefferson, Sumner counties

The ever-vigilant state comptroller’s office reports finding thievery afoot at Powell Valley Elementary School in Claiborne County, the city recorder’s office in the Sumner County city of Gallatin, a parks office and a school system Fayette County and at the New Market Volunteer Fire Department in Jefferson County in recent auditing of local government entities.

There are also “several questions” about activities at the town of Oakland in Fayette County generally along with the indictment of an official who worked both for the town and as athletic director of Fayette County schools.

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Audit catches city recorder stealing $32K

News release from the state comptroller’s office

An investigation by Tennessee Comptroller Justin P. Wilson and the Tennessee Bureau of Investigation has found that former Samburg city recorder Mary Swain stole at least $31,759 of public money.

Mary Swain was responsible for collecting money on behalf of the city, and Comptroller investigators found that she failed to deposit at least $14,471 of the cash she received for property taxes, garbage pick-up, and other city services. In fact, during the period July 1, 2013, through September 30, 2014, with the exception of fire protection fee collections, Swain deposited only $85 of the cash she received.

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More on Durham audit — up to 500 violations, June hearing set

From The Tennessean’s overview story:

Former state Rep. Jeremy Durham violated state campaign finance law possibly as many as 500 times, including spending more than $10,000 of campaign funds illegally to buy an airplane ticket for his wife, custom suits, spa products and sunglasses, according to a state campaign finance audit released Wednesday.

He also used campaign money for more mundane bills, including lawn care and paint for his home office, the audit shows.

Durham made at least 55 illegal purchases using money given by donors; the state report outlines 39 expenses, but some include multiple purchases. The former Franklin lawmaker also used campaign funds to invest more than $100,000 in the company of a wealthy GOP donor, loan nearly $30,000 to a professional gambler who has a criminal past and loan $25,000 to his wife, auditors found.

Durham paid himself $7,702 from his campaign account for expenses he’d already been reimbursed for by the state, according to the audit. The practice is more commonly known as double-dipping.

…In addition to the illegal use of campaign finances, the audit details how Durham invested more than $100,000 in Life Watch Pharmacy, a company owned by Andrew Miller, a prominent Republican donor who has advocated for anti-Islam policy in the state.

…The report also states David Whitis, a professional gambler who has a criminal record, received three checks totaling $29,800 from Durham’s campaign account…Two of the checks to Whitis indicate the funds are a “loan to friend.” Additional information provided to the auditors by Durham states the money was “capital for a startup venture.”

From WPLN’s report:

Durham’s attorney has a “laundry list” of objections to the findings. Peter Strianse also says he thought the report was a draft that would not yet be distributed widely.

“I understand if that’s they’re procedure and those are the steps we have to go through,” says the lawyer. “But why in the world would you make public a report that you know is going to be subject to significant challenge?”

But a Registry official says the office followed standard protocol.  

Durham’s attorney has until May to respond to the findings, before a hearing slated for June.

The Franklin Republican was expelled from the legislature last year following nearly two dozen anonymous claims of sexual harassment.

A federal investigation into potential campaign finance violations is ongoing. 

 

Registry audit finds multiple campaign finance violations by Durham

The Registry of Election Finance staff today released its audit of former state Rep. Jeremy Durham’s campaign disclosures at a meeting of the Registry board. Here are the top-listed findings:

1. Jeremy Durham violated T.C.A. §2-10-105(a) and T.C.A. §2-10-107(a)(2)(A) by failing to report $36,334.95 in campaign contributions.

2. Jeremy Durham violated T.C.A. §2-10-105(a) by reporting $4,600 in contributions where the associated funds cannot be identified as being deposited into a bank account.

3. Jeremy Durham violated T.C.A. §2-10-105(a) by failing to report $10,623.70 in interest earned on campaign funds and T.C.A. §2-10-114(b)(1) by depositing $1,637.50 of that interest into his personal account.

4. Jeremy Durham violated T.C.A. § 2-10-302 by receiving $5,500 in contributions over the campaign limits.

5. Jeremy Durham violated T.C.A. §2-10-105(a) by reporting $6,500 of contributions intended for PACs he controlled as contributions to his campaign account.

6. Jeremy Durham violated T.C.A. § 2-10-107(a)(2)(A) by failing to accurately disclose the names of several contributors. 7. Jeremy Durham violated T.C.A. §2-10-105(a) and T.C.A. § 2-10-107(a)(2)(B) by failing to accurately report campaign expenditures.

8. Jeremy Durham violated T.C.A. §2-10-114 by disbursing $10,176.35 in campaign funds for prohibited activities.

9. Jeremy Durham made cash withdrawals and reimbursements to himself in the amount of $11,927.43 from campaign funds without support which is a violation of T.C.A. §2-10-114(b)(1).

10. Jeremy Durham reimbursed $7,702.07 in expenses to himself from his campaign account that were also reimbursed by the State of Tennessee which is a violation of T.C.A. §2-10-114(b)(1).

11. In violation of T.C.A. §2-10-212(c), Jeremy Durham failed to retain sufficient expense records to determine whether all expenditures were allowable.

12. Jeremy Durham disbursed $64,800 for promissory & convertible note activity which appears to be unallowable per T.C.A. §2-10-114(b)(1).

The full report is available by clicking on this link: durhamaudit

TN State Museum being audited — again

The Tennessee State Museum is under audit for the third time since 2011, reports The Nashville Post.

Deputy Director Mary Jane Crockett-Green sent an email to members of the Douglas Henry State Museum Commission confirming the audit, although at least six people from the Comptroller’s office started their work the day before.

“In Chairman [Tom] Smith’s absence due to travel, I have been asked to inform you that the Office of the Comptroller of the Treasury has scheduled an audit of the State Museum for the period of January 1, 2016, through December 31, 2016,” Crockett-Green wrote. “In addition to re-examining the Museum’s internal controls and confirming that all statutory requirements are being met, one of the primary objectives of the audit is to ensure that the corrective actions to mediate past Findings are being appropriately implemented.”

The new audit follows months of extensive reporting by the Post on the troubled agency and its apparent lack of oversight by the state commission entrusted with those duties — and it follows two highly critical audits in January 2011 and September 2015. In addition to new problems, the latter audit found the museum had still not implemented several procedural changes deemed necessary by the former one.

 

 

 

 

 

Legislators blame Alcoholic Beverage Commission troubles on board members

Audits finding problems at the state Alcoholic Beverage Commission, some dating back to 2007, have led to legislators urging that members of the ABC board be replaced, reports the Times-Free Press.

Sen. Mike Bell, R-Riceville, and Rep. John Ragan, R-Oak Ridge, both expressed their belief commissioners should be ousted, and ousted soon, because of failures noted in audits in 2007, 2009 and last month.

“When you look at an audit and the first finding starts with the line ‘as noted in the 2007 financial and compliance audit,’ there’s a problem,” Bell said. ” Who [these failures] fall back on are the commissioners. That is where the buck stops. They’re the ones, in my opinion, who have not been giving proper attention and oversight to the executive director.”

“That is where the buck stops. They’re the ones, in my opinion, who have not been giving proper attention and oversight to the executive director.”

…Last month’s audit found continued failure in key areas stretching back more than a decade. The commission failed to put proper policies in place to oversee licenses, did not properly keep track or handle confiscated evidence and did not have proper conflict-of-interest policies in place, among other failures noted in the audit. (Note: The full audit report is HERE.)

The (Joint Government Operations) subcommittee voted to recommend the commission continue for at least four more years but asked auditors to follow up within a year to examine what improvements have been made.

However, if Bell has his way, the commission will have new leadership. He encouraged lawmakers and commission directors to write a letter asking Gov. Bill Haslam to replace the current commissioners.

“There will be a letter under my signature going to the governor,” Ragan assured Bell.

The commission consists of Chairwoman Mary McDaniel, John Jones and Bryan Kaegi. They did not attend the hearing Wednesday morning.

McDaniel and Kaegi were appointed to the commission on the same day in 2011 while Jones replaced his father on the commission in 1992. They each have overseen the commission during a stretch when audits found key failures throughout it.

“These were not just crossing T’s and dotting I’s,” Bell said. “These have to do with integrity of the system.”

Audit finds fault with some aspects of state outsourcing

A new audit of the Department of General Services by the state Comptroller’s office finds some shortcomings but is less critical of Tennessee’s outsourcing efforts than in a 2013 review, reports the News Sentinel.

Policies since adopted have resolved most of the previously cited problems, the new audit says, but auditors still found fault with oversight in privatization by the department’s division known at State of Tennessee Real Estate Asset Management or STREAM. A list of “findings” that were deemed troublesome by the auditors:

“STREAM executive leadership did not establish adequate processes, did not maintain updated policies and procedures, and did not provide adequate direction to staff related to leasing processes.” In general, the issues involved failure to keep track of leases, related documents and building owner compliance with terms of the leases.

“When executing lease procurements, STREAM management did not comply with State Building Commission policy or department policies and procedures.” The neglected policies included obtaining and filing conflict-of-interest disclosures and renewal of leases involving a period of more than five years or a value and/or $150,000 in value without getting official commission approval.

“STREAM’s lease management team failed to effectively track and address the state’s leases before they expired.” In a sample of 25 leases reviewed, the auditors found that in 13 cases STREAM did not review renewals and simply defaulted to a “holdover” clause in the existing lease. In six cases, STREAM had no communication with the state agency using the leased building prior to an automatic renewal.

“STREAM management did not always ensure Jones Lang LaSalle submitted all monthly reports and performed property inspections as required by the facilities management contract.” The contract with JLL calls for the company to physically inspect each building every three months if it covers more than 20,000 square feet of space; annually if less than that. In a majority of cases, the deadlines were missed, auditors said, by anywhere from as little as 10 days to as much as 957 days.

The auditors also surveyed officials of state agencies that used leased building and found that a majority declared themselves satisfied with arrangements and many complimented JLL on its handling of issues raised.

Note: The full audit is HERE.

Audit says waiting time at driver license stations longer than reported

A new comptroller’s audit raises doubts about the accuracy of how the Haslam administration measures wait times for driver’s license applicants at Department of Safety and Homeland Security-run license stations, reports the Times-Free Press.

The problem?

“[W]ait times are measured from the time a client receives a ticket at the driver license station, not when the client first enters the line at the state, to the time the examiner enters the client’s transaction into the computer upon the transactions,” auditors from Comptroller Justin Wilson’s office said.

…Regarding the driver wait time issue, auditors visited several stations to see how it all worked for themselves.

“Although we did not see lines outside the buildings during the middle of the day, some clients stated that they did wait a considerable amount of time before they got their tickets,” the 49-page audit says.

Some auditors were told of waits as long as two hours. The department is supposed to get transactions processed in under 30 minutes.

…Auditors noted the first step in the Driver Services Division’s Q-Matic computer system process, which is used to track wait times, calls for issuing tickets to each application either upon entering the (station) or, if the line is longer, setting the ticket issuer up outside the station.

“Driver license station staff are clearly not doing this,” auditors said and then went on to raise the key issue. “Without taking into consideration when clients first attempt to get services at the stations (i.e., when they first enter a line), the division cannot accurately measure all customer service delays at these stations.”

Note: The full audit report is HERE.