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Comptroller assigns some blame to Rogersville Water Commission for $338,929 theft

Jeff Bobo • Apr 20, 2018 at 11:35 AM

ROGERSVILLE — While former water superintendent Shawn Hatchett will suffer the criminal repercussions for allegedly stealing at least $338,929 from the Rogersville Water Department, the Tennessee Comptroller has concluded that the Water Commission bears some responsibility for not catching it sooner.

On Thursday, Rogersville Mayor Jim Sells told the Times News he anticipates that some changes might be made to the Water Commission in light of Hatchett’s arrest Wednesday on charges including theft over $250,000, theft over $60,000 and official misconduct.

Among the allegations against Hatchett are that he failed to make cash deposits at the bank, kept those funds for his own use, and then made up for the missing funds with the next cash deposit.

As a result, Hatchett buried himself deeper and deeper into a hole until a $69,444 discrepancy was discovered.

Attorney General Dan Armstrong described the scam as similar to check kiting, except with cash bank deposits.

Hatchett is also accused of illegally authorizing overtime pay for himself which in essence more than doubled his base salary of $75,000 to $152,013 in 2015, and $170,695 in 2016.

By the time he was fired in August of 2017, Hatchett's base salary had earned him $49,365, but his illegal overtime had allegedly netted him another $45,782.

Mayor Jim Sells’ reaction

Sells told the Times News that the city’s response to questions about Hatchett’s arrest will be limited until the Board of Mayor and Aldermen and Water Commission consult with City Attorney Bill Phillips.

Sells said the city will issue a press release in the near future.

Sells did say, however, that the BMA isn’t involved in the day-to-day operation of the Rogersville Water Department, and he and his board members were as blindsided by these allegations as any other citizen.

“We give final (budget) approval on money, but we don’t give final approval of how that money is dispersed,” Sells said. “... I don’t want to be blamed for it because they’re completely separate from us.”

Question: Do you believe it was the Water Commission’s responsibility to realize Hatchett was paying himself double his base salary?

Sells: “I don’t think that I need to answer that until I find out exactly what happened. What you saw (in the Comptroller’s report) is what I saw.”

Queston: Are you going to look at the possibility of replacing any of the Water Commission members?

Sells: “We’re going to look at a lot of avenues.”

Comptroller takes Rogersville Water Commission to task

A Tennessee Comptroller’s report released Wednesday states that Rogersville Water Commission deficiencies in administering certain financial processes contributed to Hatchett’s ability to allegedly continue stealing money for more than two years before it was detected.

Among the Water Commission “deficiencies” outlined by the Comptroller were:

* Failed to ensure that staff responsible for depositing collections did so as soon as practical, but no later than three working days after receipt, into an authorized department bank account. The Water Commission also failed to adequately monitor Hatchett’s safekeeping and handling of cash collections.

* Failed to supervise adequately the work time Hatchett claimed and was paid for. The Water Commission failed to consider or investigate the reasonableness of the hours Hatchett claimed he was working (as many as 3,000 overtime hours in one year); or the duties and responsibilities that supposedly demanded Hatchett’s time considering that the water department employed highly competent and capable supervisors available for all aspects of the department’s operations.

* Failed to review decisions made by Hatchett to the detriment of the department. Hatchett permitted employees to enter regular time into their time sheets while they were out of work for both routine illnesses, as well as for extended health-related absences. Hatchett did not require employees to use compensated leave time when required by department policy.

* Allowed the pre-signing of blank department checks, negating the benefit of requiring dual signatures, and removing crucial control over disbursement of department funds.

* Allowed Hatchett to disregarded the outside employment policy applicable for the water department when he contracted to do water testing for Hawkins County Schools; as well as the nepotism and compensation policies that applied directly to him by allowing him to hire his son in 2016.

The Comptroller stated in its report that the Rogersville Water Commission indicated it has corrected or will correct these deficiencies.

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