A proposed Hawkins County ordinance to protect taxpayer money distributed to nonprofit organizations will have an unintended affect of guarding those organizations from internal financial abuse. And history shows need for such a safeguard.
Last September, Hawkins County Mayor Jim Lee announced he would require financial records dating back three years from nonprofits before they could receive county money. That announcement came after four organizations became subjects of state comptroller investigations for alleged spending irregularities, including the treasurer of both the Hawkins County Fireman’s Association and the Church Hill Rescue Squad, who admitted to taking funds.
Mayor Lee acted to ensure county donations against misuse, but there was some initial resistance to his order, with several agencies refusing to turn over their books. Hawkins County Hazmat was among them and said that without county financial support, it would be forced to shut down this month.
Lee stood his ground, and Hazmat and other organizations relented.
Stanley Valley Volunteer Fire Department Chief Stacey Vaughan stated at a December Public Safety Committee meeting that he could find no law giving Lee authority to withhold funds approved in the budget by the commission. Nevertheless, Vaughan turned in his agency’s records and recommended that the commission give Lee’s instruction force of law. And that’s what the commission should do when it meets Jan. 25.
The County Commission’s Budget Committee voted 6-0 last month to recommend that the full commission adopt a resolution requiring bank statements, canceled checks and other pertinent financial records of all nonprofit agencies that receive annual funding; all records and not just those defining use of county contributions.
At a previous county Public Safety Committee meeting it was suggested that the county only require records on how the county funding is spent but not funds that nonprofits raise through private contributions and other fundraisers. But that would not be practical with all revenues typically going into a general fund.
Budget Committee Vice Chairman Keith Gibson believes the commission should require all financial records from the previous year.
“If they show records of the money that we give them, but they’re doing something illegal with all their other money, then there’s no way you can see that if we don’t get those records,” Gibson said. “On some of these records he (Lee) has been finding that. They are taking money, using ATM cards and taking the money out, and nobody knows where the money is going.”
Lack of oversight and failure to perform annual audits have allowed misuse of funds by some nonprofits, and a county ordinance requiring annual financial records of all organizations receiving county money may find irregularities that otherwise would be missed. That, in itself, justifies such an ordinance.