Saturday, April 9, 2011

MY Minutes: 2011.4.4 - Legislative Committee - Consideration of Audit Committee

I know that Education has been in the news this week, but this past Monday, the RCC Legislative Committee met. The primary purpose of this meeting was to discuss an Audit Committee.
The Comptroller’s Office of the State of Tennessee “suggested” (think: mandated) Robertson County create an Audit Committee, and do so by year’s end. You may recall that I suggested the same here discussing the state comptroller’s proposal.
The Legislative Committee (LC) received a boiler plate resolution for the creation of an audit committee. What the LC ultimately did was continue deliberation on the resolution until a later meeting. This continuation was predicated on us having a chance to analyze the resolution further.
This development seems timely, because it looks like Maury County took up a similar effort here this past week. (see the article in the Columbia Daily Herald) They rejected their resolution, which I find interesting in its own right. However, I do not want to focus on the rejection as much as I would want to focus on their discussion. It is discussion that we will have. What I will do is go through their “pros” and “cons” of the arguments submitted from Maury County leaders. (As always, my humble opinions will be in italics)
State auditors are recommending Maury County create a committee to guard against fraud, waste and abuse in local government.


But Maury County commissioners think such a committee would only duplicate services they are already providing.
In our discussions here in Robertson County, I have heard the very same argument submitted. I respectfully disagree that it would necessarily “duplicate services.” Not to single out a department, but the EMS issue for us is timely. An Audit Committee could have served as a safety net for those issues we have had to discuss for the past several months.

The Maury County Administration Committee voted Thursday against creating an audit committee, which would consist of three county commissioners and two citizens.


Commissioner June Beckum said the measure would just create more government bureaucracy. She said county finances are already monitored by a committee, and the state routinely audits the county’s books.
I think that this is a concern, as well. Frankly, this is why I wanted to analyze this measure further. I believe that Commissioner Steve Haley voiced some of the same concerns at our meeting. The balancing test will be with what positives are to be gained by creating an existing governmental layer here. I know that statement in and of itself sounds somewhat troubling to many out there! But, that is why I want to clarify what their role would be.
“This committee would not be offering us any oversight or additional protection than we already have,” Beckum said.
See, this is where I frankly disagree as applied to Robertson County. Reason being, we annually receive audits from the State Comptroller’s offices. We, too, have an EMS Committee and a Budget Committee, but in going back to my example, the irregularities and oddities with record keeping and disclosures was still vibrant within EMS.

The last part of the phrase is crucial, and if applied to EMS, would we have had all of the irregularities and oddities from EMS? Maybe not.
The audit committee would have been charged with reviewing audit findings by the state comptroller’s office, monitoring internal accounting procedures, establishing a process for whistleblowers to confidentially report fraud and presenting an annual report on how it discharged its duties.
State Comptroller’s Findings& Internal Accounting Procedures - Now, I am not an accountant, nor do I proclaim to be a “finance guy,” but it is my understanding that this State Audit only looks at the county-wide information presented by our Finance Office. They do not look at the information presented to the finance office. The Finance Office does a very good job for us, but they do not independently (and candidly, cannot “independently” audit) audit each department. Now, with that said, they do not take the information they are provided from each department with a grain of salt. But, they have no oversight or control as to how things are done procedurally within each department. This is the key. An audit committee would have authority to do just that. Going back to EMS, this is how “questionable timecards” and “questionable spending” was allowed to flourish for a considerable time.
Process for whistleblowers – This would be an important part to any audit committee. Again, to borrow my example, much of what I have heard from folks close to EMS has to do with their was no ability for any of those employees to report just what was going on with leadership. Now, I will have to take some of that with a grain of salt, but if employees are given the opportunity to speak of irregularities, free from fear of recourse being taken against them, then some of these issues may have been addressed before they become serious. Now, I know immediately what the response will be: fear of frivolous claims by employees. Well, I would respond by saying that as a lawyer, I am accountable to our “Board of Professional Responsibility” for complaints that client’s of mine may have against me (hopefully not!). Many times, folks complain about their lawyers (again, hopefully not about me!) to the Board, but the Board need not even follow-up because the frivolous claims are filtered out. Yet, clients need the opportunity to speak to someone other than their lawyer about their concern. The important thing is, it gives the client an opportunity to reach out to an independent body to look at matters.

Unlike other county boards, state law allows audit committees to be exempted from public records and open meetings laws when hearing confidential complaints from government employees, taxpayers and others, county attorney Daniel Murphy said.
This is just furthering my previous points.


Anonymous complaints about fraud can also be made via a toll-free number maintained by the state.

Maury County Commission Chairman Scott Cepicky, a chief supporter of the measure, said he thought an audit committee would have provided another layer of oversight and made it easier for whistleblowers to file complaints with local leaders.
Commissioner Cepicky is just also furthering my previous points. I love this quote, because “accountability” is what I stand for as a public servant.



Auditors referred the matter to District Attorney Mike Bottoms, but he said he found no wrongdoing. Bottoms said the employees were rendering cleaning services outside their normal scope of duties.

Elmer Cooper, who was employed as a part-time custodian at the Memorial Building, resigned Dec. 31. His wife, Pauline Cooper, a secretary for the county, is still employed.

Mayor County Jim Bailey said his office is now collecting all fees associated with renting the Memorial Building.
Now, I know it is not the same, but read how that example reads just like our problems within EMS. And then, ask yourself if there are already controls and measures in place to observe those matters, then how did this transpire. Part of it is that the respective commissioners need to be more diligent in their efforts, yes. But, also the consideration for measures we can take to guard one of the most important responsibilities we have as public servants.
Before the committee finally considers this matter, I will try to .share with you an electronic form of the resolution we have before us.
“It’s accountability to our taxpayers who elected us to watch over their money,” Cepicky said when he unveiled the proposal this past month.
Auditors wrote in a report released March 25 they strongly believe an audit committee should be created “to 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 management’s plans to address various risks.”

In the same report, auditors found that two county employees working at the Memorial Building were collecting unauthorized fees for their personal gain by charging people renting the facility a cleaning fee that the county never approved.

The county-owned Memorial Building is available to the public to rent for wedding, meetings, dances and other events.
Now, I know it is not the same, but read how that example reads just like our problems within EMS. And then, ask yourself if there are already controls and measures in place to observe those matters, then how did this transpire. Part of it is that the respective commissioners need to be more diligent in their efforts, yes. But, also the consideration for measures we can take to guard one of the most important responsibilities we have as public servants.

Before the committee finally considers this matter, I will try to .share with you an electronic form of the resolution we have before us.

8 comments:

  1. The sort of audit of envision for the county would be a 'management audit', defined at businessdictionary.com as follows:

    Systematic assessment of methods and policies of a firm's management in the administration and the use of resources, tactical and strategic planning, and employee and organizational improvement. Its objectives are to (1) establish the current level of effectiveness, (2) suggest improvements, and (3) lay down standards for future performance. Management auditors (employees of the firm or independent consultants) do not appraise individual performance, but may critically evaluate the senior executives as a management team. See also performance audit.

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