Kingsport Times News Saturday, August 29, 2015

Local News

October 21st, 2008 12:00 am by Jeff Bobo

SURGOINSVILLE — The Surgoinsville Water Utility’s Board of Commissioners won’t immediately seek an independent audit to confirm or contest findings of misappropriation and money laundering by one of its commissioners alleged in a report released Monday by the office of the Tennessee Comptroller of the Treasury.

But attorney Crystal Goan, who represents the utility district, said water commissioners will work to enact several of the comptroller’s recommendations to five negative findings included in the report in addition to the criminal allegations.

The utility’s Board of Commissioners met in closed session Monday evening with their attorney to discuss the comptroller’s report, which alleges that Water Commissioner Hanes Cooper received more than $65,000 above his “lawful compensation” between 1998 and 2007.

Cooper, who is also a sitting Hawkins County commissioner, former Surgoinsville mayor and candidate for Surgoinsville alderman in the Nov. 4 election, will remain a commissioner for the utility district, Goan told the Times-News Tuesday.

“We’re going to take steps to clear up the problems that we see, and we’re going to wait to see what the district attorney does. But in the immediate future we’re going to take the necessary steps to make our facility better,’’ Goan said. “We haven’t (ordered an independent audit) yet. We’re going to wait a couple of weeks and see how they (the comptroller’s office) came up with those exact numbers.

“We want to get as much information from the comptroller’s office as we can, but they will probably not want to turn over a lot of the information, especially if they’re going to turn it over to the grand jury. But we want to get as much information as we can so if there is a problem we can fix it.”

The comptroller’s report on the Surgoinsville Water Utility alleges that between April 1, 1998, and Oct. 31, 2003, Cooper received payments from the Surgoinsville Water Utility “in excess of his lawful compensation” totaling $30,310. The report also alleges that between Jan. 1, 2004, and Dec. 31, 2007, Cooper’s daughter, Robin Hoffman, received payments totaling $35,215, and she passed the proceeds on to Cooper.

Attorney General Berkeley Bell told the Times-News Monday he expects that evidence to be presented to the Hawkins County grand jury “in the near future.”

But there were also five other negative findings in the Surgoinsville Water Utility report including:

• An employee of the utility district displayed various goods in the lobby of the the utility’s offices and sold them for personal benefit.

• Inadequate separation of duties because one full-time employee is responsible for collecting, depositing, disbursing and recording transactions.

• Failure to prepare daily cash summary reports to ensure that all collections are properly accounted for and deposited into the bank.

•Deposits not made promptly with some collections not being deposited for more than three days after being received by district personnel.

• Deposit slips not itemized, with adding machine slips instead being stapled to the backs of carbon copies of the deposit slips.

Each of those negative findings included a recommendation for eliminating the problem, and Goan said the Board of Commissioners will begin enacting those recommendations.

“We’re working through this, and we’re going to heed the comptroller’s advice and make some immediate changes, and try to bring everything up to standards,” Goan said. “We going to take measures to do our own checks and balances a little better than we did before, obviously.”

Goan said Hoffman, who is still employed part time by the Surgoinsville Water Utility, will not be asked to step down. Goan said the utility has no reason to believe Hoffman did anything wrong at this time.

“She’s been working for this facility for quite some time, and if you think about it, $60,000 over 10 years, that’s a lot of records we have to review,” Goan said. “We don’t know where the comptroller came up with those figures. We don’t know that (Hoffman did anything wrong) until we review records ourselves.

“We haven’t asked her to step down, and if she chose to it would be of her own accord.”

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