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Sullivan County may withhold funds to nonprofits

September 5th, 2007 12:00 am by J. H. Osborne



BLOUNTVILLE — Sullivan County is set to funnel $2 million to 50 nonprofit organizations this fiscal year. But those funds might be about to be put on hold.


The organizations in question include volunteer and city fire departments, health and human service agencies, libraries, tourism promotion, and services for veterans and the handicapped.


Some county commissioners have proposed randomly auditing the finances of two of the organizations each year to “make sure those expenditures serve their intended purpose.”


The latest development, which may make that proposal a moot point: state law already requires each of the nonprofits to submit an annual audit, or description of its financial statements, to the county clerk’s office.


County Attorney Dan Street, speaking Wednesday with members of the Sullivan County Commission’s Executive Committee, said that requirement hasn’t been met since 1997.


Street said he spoke earlier in the day with Commissioner Elliott Kilgore, a primary sponsor of the call for random audits each year, and provided Kilgore with information about the state law regarding submission of such audits by all nonprofits receiving county funds.


Kilgore asked if a failure to meet that requirement meant the county could withhold funding to the organizations, Street said.


“I told him I though we could,” Street said.


“Well, we need to hold their money back,” Commission Wayne McConnell said.


Jerry Fleenor, director of the county’s Emergency Management Agency, said he believes nonprofits he is familiar with have been submitting annual financial information to the county — but perhaps not to the county clerk’s office.


Fleenor said county funding to nonprofits is typically doled out in two payments — the first paid once a budget is approved, and the second sometime after the calendar year ends.


The Executive Committee took no action on Kilgore’s proposal to mandate two random audits of nonprofits each year.


The County Commission’s Budget Committee is scheduled to host a public hearing on the county’s proposed budget tonight at 7 p.m. on the second floor of the historic Sullivan County Courthouse.


Audits accounted for much of the Executive Committee’s talk-time Wednesday.


Charter Communications has paid Sullivan County about $442,000 after an audit showed the cable provider’s payments to the county fell short by that amount for the period July 2000-June 2006, county officials said Wednesday.


Now it’s time for the county — and, apparently, county residents who are Charter subscribers — to help settle up the books. County commissioners are being asked this month to OK payment of half the recovered amount, or about $221,000, to the company that performed the audit.


That 50/50 split of the recovered funds was outlined in a contract County Mayor Steve Godsey signed with Telecommunications Consulting Associates for the audit, Street said.


The same 50/50 split was included in a contract the city of Kingsport entered into with the consulting company for an audit of Charter’s payments to the city for a similar period.


Members of the Kingsport Board of Mayor and Aldermen agreed to that contract. But earlier this year some members decried the 50/50 split and said the city should negotiate to keep more of the recovered money if such an audit is performed again.


Street said Charter has notified customers they’ll be paying higher rates for the next 18 months to offset the company’s payment to the county.


Street said he received a letter from Charter at his home a few days ago. It reads, in part:


“In order to conduct business Charter Communications has a franchise agreement with each of the municipalities where we provide cable service. In the franchise agreement with your local municipality we are required to pay a franchise fee for the cable services that each one of our customers subscribes to each month. A recent audit of these fees revealed an error in the collections of the monthly fees. To collect these fees an additional 2 percent will be added to your bill for 18 months beginning with billing statements starting Oct. 1, 2007.”


The Executive Committee took no action on a resolution calling for payment of the money the county owes to Telecommunications Consulting Associates for conducting the audit.


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