AUDIT COMMITTEE MEETING MINUTES

January 23, 2024

 

Chairman Commissioner David Wamble opened the meeting asking Barry Hyatt, Road Superintendent, to offer a prayer and lead the pledge.  The minutes of 7 March 2023 were moved for approval by Commissioner Erin Curry, seconded by Commissioner Judy Pruett, and were approved unanimously.  The chair noted those minutes addressed the previous year’s audit (FY 2022) and that audit resulted in the establishment of a county audit committee as well as an added link to the county’s webpage (completed).  The Chair welcomed all including state auditors, Wanda Davis and Mark Harvill, and provided a handout of the summary of audit findings, annual financial report, for Giles County for the year ended June 30, 2023.  Those three findings are on the day’s agenda for discussion.  County Executive (CE) Graham Stowe stated he would provide announcements at the end of the meeting, rather than at the first of the meeting.

 

First finding – deficiencies regarding a communications project.  The recommendation:  Officials should enter into formal written contracts with itemized pricing after first verifying amounts against the statewide contract.  Performance bonds should be obtained as required by state statute.  This deficiency occurred after the Motorola proposal implied “as per statewide approved contract”.  This led to Giles County, as well as some other counties, understanding the proposal to cover not only equipment but other services rendered as well.  That understanding led the Financial Management Office to pay the total of $6.6M without “vetting” the other service rendered costs.  In addition, there was a possibility of the price going up if not pursued timely.  Without the detailed pricing, auditors were unable to determine if the proposal complied with the statewide contract.  Commissioner David Adams asked how did we solve the deficiency, with the Financial Manager saying it is now a done deal, and with the CE stating that the county had ensured a performance bond and equipment list prior to the auditors outbrief.  Commissioner Adams asked if the county was harmed in any way with the Financial Manager stating only in audit.  The Chair asked if there were any more questions on this particular deficiency, and there being none moved to the next agenda item.

 

Second Finding – the school department entered into a construction contract in violation of the Financial Management Act of 1981.  The recommendation:  All accounting, purchasing, and budget functions of the county should be administered by the finance department in compliance with provisions of the Financial Management Acts of 1981.  The director of schools entered into a contract with a construction company totaling $11,086,503 for the renovation of Giles County High School without the participation of the county’s finance director.  As a result, the county commission had to approve budget amendments after the fact.  As one commissioner put it, “writing a check with no money in the bank”.  As a result of this finding, the current GMP contract for Bridgeforth will not be signed until the proposed bond and funding is put into the correct line item. Commissioner James Lathrop, considering several construction projects planned, asked for clarification between a proposal and a bid.  Wanda Davis, mid-Tennessee senior auditor, discussed how certain professional services, e.g., architectural, engineering, are not put out for bid, but for proposals.  Commissioner Erin Curry gave additional information based on her own profession as an engineer.  She said the acceptance of a submitted proposal is based on qualifications and a proposed fee.  After accepting that proposal the fee may be negotiated.  Commissioner Gayle Jones had phoned the absent Commissioner Mathew Hopkins (as a member of this committee and with no one available to represent that district,) had taken a question for the committee.  Commissioner Hopkins asked what deterrence is there to assure this type deficiency wouldn’t occur again.  Commissioner Evan Baddour said “lesson learned”; the Chair “no malice in this occurrence”; Commissioner James Lathrop on how to move forward.  Ms. Davis stated that the deficiency had been discussed with the school superintendent and with the school board chairman (the school superintendent can sign certain contracts within the school’s budget), and both understood the finance manager must be involved in construction contracts.

 

Third Finding – Unresolved errors resulted in a cash shortage of $553.  Recommendation:  Officials should take steps to liquidate the cash shortage.  Erroneous charges should be identified during the monthly bank reconciliation and corrected promptly.  This error occurred prior to the current Trustee’s term and was due to an out-of-state utility charging erroneously to the county’s account.  Given the time between the Charge and the subsequent identification of the shortage, and with numerously attempts to correct, the county could not resolve the issue.  A previous Budget Committee motion on 12 January 2024 had resulted in recommending the writing-off of the shortage. In addition, the Trustee performs a reconciliation monthly.

 

Old Business – Commissioner Evan Baddour, noting the severe weather, the resulting citizen calls, the water line problems, asked what committee should address the water situation across the county.  Commissioner Gayle Jones asked if the water districts or audited, and Ms. Davis said they do an independent audit and that is published on a website.  Commissioner Evan Baddour asked if that was provided to the commissioners or do you seek it out; Ms. Davis said you have to seek it out.

 

CE announcements:  During the recent full commission meeting and based on ambiguous language in the county’s Rules of Order, a vote was taken resulting in a 9-vote tie and the CE broke the tie.  However, the 10-9 votes were invalid decisions because TCA statute requires a majority of the membership, not merely a majority of the quorum.  He has drafted a change to Rule VIII and is working with the chair of the legislative committee for a meeting to revise the errant rule.  The CE also noted the annex facility has water problems due to pooling ice melt, e.g., the roof leaking.

 

New Business – The CE noted that in full commission meetings, New Business should be reserved for issues requiring commission action; administrative issues and routine questions can be handled; he stated his door is always open for that type discussion.  He also encouraged all to spend time with the Financial Director Beth Moore-Sumners and her staff to become better acquainted with budget processes and payroll concerns.  Commissioner Erin Curry noted that CTAS also has several on-line classes that would be useful.

The CE noted some of the long-term water issues are being addressed through TDEC grant funding, but also stated the water infrastructure and water customers would be well served in water utilities worked toward consolidation.

A motion to adjourn was made by Commissioner Erin Curry, seconded by Commissioner Brad Butler and was approved unanimously.

 

Attendees:  Chair Commissioner David Wamble,  Commissioners Erin Curry, David Adams, Brad Butler, Evan Baddour, Judy Pruett (for Tammy Mathis – absent) and Mathew Hopkins (absent)  Other Commissioners – Gayle Jones, Joyce Woodard, James Lathrop, Annelle Guthrie  Other – County Executive Graham Stowe, Financial Management – Beth Moore-Sumners and Shana Woodard, Road Superintendent Barry Hyatt, and Steve Kelley,  State Auditors Wanda Davis and Mark Harville; other Scott Stewart