Friday, December 31, 2010

Audit Committee [?]

As the Budget Committee meeting I have discussed draws closer, one thing that continues to come to the forefront of my mind is the entire premise and agenda for this meeting.

It is what I have discussed before, the premise that the solution will have nothing to do with analyzing our budget expenditures. The solution will be a determination with whether we will re-structure our debt and/or raise our taxes.

By most principals involved, we are being told that we must do one of the two, or both. We are told there are no other options.

Yet, no one has explained to me, and I have not heard why we cannot even look into other options.

Well, coincidentally, I came across this post by TCCA Executive Director David Connor on commission a memorandum received on "Audit Committees" for local governments. This post is interesting in its entirety and I would encourage you to check it out. I have also pulled the Tennessee statute is referenced for my own review (if you would like a copy of the text, e-mail me).

I am very interested in this form/type of committee. Here's why: This seems to address the very concerns that I referenced in my opening paragraphs – fiscal responsibility. This issue was one I ran on and it is one I heard time and time again in my walks through District 10. Many of my fellow commissioners have expressed the same that they have heard from their own districts. An "Audit committee" could
conceivably address the very items brought to my attention during my door-knocking throughout District 10: fiscal responsibility - "transparency" and "accountability."

Here is what jumped out to me from the Tennessee statute:
(b) The governing body of the local government shall create the audit committee. The audit committee members shall be external to management and may be members of the governing body, citizens from within the boundaries of the local government, or a combination of both. Members of the audit committee shall be selected by the legislative body. The audit committee shall establish responsibilities and duties that are stated in a resolution approved by the legislative body. The responsibilities and duties, at a minimum, shall address financial and other reporting practices, internal control, compliance with laws and regulations, and ethics. The resolution creating the duties and responsibilities of the audit committee shall be submitted to the comptroller prior to approval by the legislative body. The comptroller shall review the proposed resolution and report back to the local government on whether the resolution follows recommended guidelines for an audit committee. The resolution adopted by the legislative body must conform to the report issued by the comptroller. (Tenn. Code Ann. § 9-3-405(b) (emphasis added)
And, there it is, I think that would be the most effective way to be "transparent" and "accountable," instead of the status quo of telling you the way it is, and the way it will be. This General Assembly encourages local leaders to defer and cooperate with "citizens from within the boundaries" by encouraging them to be a part of the process.

Instead of just going back to the same modes and means that got the County into this fiscal position, it is time to think of other modes and means. An "audit committee" may be part of the solution, and it may not be the solution. It is just a different an idea. I just know that the same old solutions applied to the same old problems is what I got the County in this position in the first place.

Maybe it is time to think of other options like this instead of running first to re-structure and tax increases.
It is what you, the "citizens from within the boundaries," do with your own family budgets.
It may be worth looking into this year, this new year, since it is a new idea. For as the memorandum goes on to state:
We believe well structured audit committees can improve the financial management and overall governance of governmental entities in Tennessee. Our office (County Audit) has encouraged the establishment of an audit committee in local governments for many years. However, very few local governments have an effective audit committee. We believe in today's environment of fewer resources and increased demand for transparency and accountability, it is time to focus on the audit committee as an effective tool to improve the operations of local governments.
Maybe this new idea is ripe for this County? If not this, then there should be others out there…


  1. EXCELLENT idea. After four years on the Commission, I am starting to come to the conclusion that we need more unelected citizens on all of our committees. By incoporating more unelected citizens on Committees we train people to be commissioners and we also are in tuned to the tax payers. I haven't read the article but my question would be WHO would be on this audit committee? Would they expected to be compensated for their time? And would any suggestions they make be binding? I am open to any and all suggests that might help us.

  2. Jonathan,

    I posted this contact info for county audit in reply to your comment on my blog, but in case you didn't see it, I wanted to provide it here as well.

    You can link to the division of county audit here:

    The phone number for the Division of County Audit is (615) 401-7841.

    E-mail, a fraud and abuse hotline and other resources can be found on the website linked above. Let me know if you need any additional info.

    Glad the post was helpful.

  3. The audit committee could be very useful if you appoint people who know how to read financials and can run a cash-register.

    What Robetson County needs is a Chief Financial Officer(CFO)that only answers to the Commission. We must hire someone that is a CPA and has been a successful CFO at a profitable company. With a qualified professional overseeing the financial affairs of all of the county's entities we will save more that the position will cost.

  4. I think the audit committee is a step in the right direction. There needs to be some better form of accountablity. When our budgets are tight at home we don't go out and borrow more money, we tighten belts and cut back. I think having more citizens on committee's is also a good idea in that our citizens need to be more involved and understand the workings of our county and our officials need more involvement from the tax payers. Thanks Jonathan for all you do. If you need me to help out on a committee as a citizen, let me know

  5. Good idea, but I wonder what authority an audit committee would have over Constitutional departments, which is what makes up most of the county. If an audit revealed waste, fraud and abuse, what could actually be done?