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State audit notes 'significant' problems in Sullivan's bookkeeping

J.H. OSBORNE • Feb 2, 2020 at 11:00 AM

BLOUNTVILLE — The state’s audit of Sullivan County government’s finances for the fiscal year that ended June 30, 2019 is complete. And it isn’t good. In fact, it is the most critical such report for the county in recent memory.

Just four years ago, Sullivan was among only five counties across the state to have received a “clean” audit, meaning auditors found not a single problem. The biggest revelations in this recent audit call attention to “significant” problems in basic bookkeeping in the office of Sullivan County Trustee Susan Ramsey. In Tennessee, a county trustee is often likened to a treasurer.

The audit, however, does not indicate that any funds are missing.

Ramsey took over the office from longtime Trustee Frances Harrell, who retired in June 2018. Ramsey had won the Republican primary for that office the previous month, and because she had no opponent in the August general election, the Sullivan County Commission appointed her to fill the remainder of Harrell’s term.

“When somebody walks out of the doors after 40 years, you lose a lot of experience,” Ramsey told the Times News by telephone last week, referring to Harrell’s tenure. “It (the multiple audit findings) shouldn’t happen again.”

Ramsey, who was at home sick, said she didn’t expect the extensive findings.

“The way I see it, that’s menial compared to what it could have been,” Ramsey said. “It’s just been a huge learning curve.”

According to Ramsey’s responses to the state to problems identified by the auditors, she in part blames them on the office lacking experience after her predecessor’s departure. Ramsey has had to seek help from a person experienced in governmental accounting “to guide the department in having a structured plan for all daily accounting duties.”

According to public information available from the county’s payroll office, that help is in the form of a contract worker at a rate of $30 per hour. No cost is available at this time because no payments have been made to the contractor.

Also according to public information on file with the payroll office, the vast majority of Ramsey’s employees are holdovers from Harrell’s staff.

The following are findings (in bold) and some details from the state’s audit:

The accounting records had not been properly maintained.

“Our examination revealed the following deficiencies related to the administration and maintenance of the accounting and reporting system of the Trustee’s Office,” state auditors wrote. “General ledger account balances for cash on hand, cash in bank, and investments were not reconciled accurately with actual balances and supporting statements from July 2018 through June 2019. While personnel attempted to reconcile these accounts, significant differences had not been identified and corrected.”

Ramsey’s response: “I concur with the finding. The previous official had been in office over 40 years and her knowledge and experience left the office with her. As a result, issues surfaced very shortly after taking office that have necessitated the need for staff with governmental accounting knowledge and experience to assist with accounting functions. I now have someone in place to assist and provide guidance with the day-to-day accounting operations of the office.”

The monthly trustee’s report was not completed and filed in compliance with state law

• The Trustee’s Office did not file the monthly trustee’s report with the director of accounts and budgets and the director of schools in compliance with state law, which states that on or before the 10th day in each month the trustee shall report and make settlement for all taxes collected during the preceding month.

“We noted only one instance between July 2018 and June 2019 where the monthly trustee’s report was filed with the director of accounts and budgets by the 10th day,” auditors wrote. “This deficiency was the result of a lack of management oversight.”

Ramsey’s response: “I concur with the finding. The clearing of checks and other duties have been updated to provide a faster and more accurate way of preparing monthly records that affect the trustee’s report. The office is striving to ensure that the report is accurate, printed, and delivered by the 10th of the month.”

The office had deficiencies in monthly trustee commissions

• The trustee did not pay some commissions to the county monthly. State law requires fees, including commissions, to be paid to the county monthly.

“These deficiencies are the result of a lack of management oversight,” state auditors wrote. “As a result, the county received the trustee’s commissions late and may result in improperly reported revenue.”

Ramsey’s response: “I concur with the finding. Procedures have been implemented to ensure commissions earned and taken are accurate. The software vendor was contacted, and a journal entry is now prepared at the end of each month to transfer commissions to the General Fund.”

To view the full audit online, visit https://comptroller.tn.gov/content/dam/cot/la/advanced-search/2019/county/FY19SullivanAFR.pdf.

Staff writer Rick Wagner contributed to this report.