Category Archives: Comptroller

Comptroller: Jail inmate got full-time county job

News release from state comptroller’s office
An investigation by the Tennessee Comptroller’s Office has found numerous problems with the way inmate labor was handled within the Marshall County Solid Waste and Sheriff’s Departments. Marshall County allowed jail inmates to work at the county’s solid waste facility in Lewisburg.

Investigators determined the solid waste director hired an incarcerated felon as a full-time county employee at $12.46 per hour. He received the same employee benefits as other county employees including health insurance, retirement, and sick leave. The inmate was paid a total of $12,444.43 by the county.

Comptroller investigators also found that inmates working at the solid waste facility were not properly supervised. This led to workers scavenging and hiding alcohol, drugs, tobacco products, cell phones, weapons, pornography, and other contraband items within the facility. Continue reading

School money stolen for drinking, gambling

A former Knox County Schools supervisor accused of using his district-issued credit card to place online gambling bets pleaded guilty Wednesday to felony theft of more than $10,000, according to the News Sentinel.

Roger Underwood, 61, has agreed to a three-year sentence, but the details will be determined by Criminal Court Judge Scott Green on Sept. 29.

The state plans to object to judicial diversion, said Sean McDermott, a Knox County assistant district attorney general.

Underwood has agreed to repay the $11,989 he stole by that hearing, McDermott said.

The former accounts payable supervisor, who had an annual salary of $96,074, was fired in October after admitting to using his school credit card for personal purchases. Investigators found he placed bets ranging from $99 to $299 on the card, losing as much as $1,800 in one day gambling online.

A report from the Tennessee Comptroller of the Treasury also questioned $731 in charges during a retirement reception at a Mississippi casino, where Underwood also ordered martinis, peach schnapps and a $200 tray of hors d’oeuvres and gave a $115 tip.

He also received reimbursements for school-related trips he never took, officials said.

“Because Underwood was responsible for reviewing school credit card charges, including his own, officials were unaware of these inappropriate charges,” the comptroller’s report states.

TN bonds sell cheap (2.16%) with credit upgrade

News release from state comptroller’s office
The State of Tennessee has just completed the very successful sale of approximately $366 million of general obligation (GO) bonds. This is Tennessee’s first bond offering since receiving an upgrade of its bond rating to AAA from S&P in May 2016.

Tennessee’s top-rated credit sparked demand from investors while keeping interest rates extremely low.

The debt offering was sold in three series of bonds. The proceeds will be used to fund new capital projects and refinance currently outstanding bonds. The refinancing will save Tennessee taxpayers $22.8 million dollars over the next 15 years.

The combined true interest cost for the bonds was 2.16%. Records indicate that this is the lowest interest cost for a negotiated sale in the state’s history and is a direct result of Tennessee’s highly regarded credit and favorable market conditions.

“It gives me great pleasure to announce yet another history-making Tennessee bond sale,” said Comptroller Justin P. Wilson. “The Tennessee General Assembly and Governor Haslam have worked hard to place Tennessee in an incredibly strong financial position. Tennesseans are benefiting from the lowest interest rates in state history. It’s good to be a triple, triple-A state.”

Mismanagement prompts Dept. of Ed takeover at ASD

Tennessee Department of Education officials have been quietly taken over because of inept handling of fiscal affairs, according to a Comptroller’s audit outlined to legislators Wednesday. The actions included dismissal of the entire financial management staff at ASD. The audit reported troubles ranging from a $2,500 expenditure for a party where liquor was served to generally loose oversight of money.

Further from the Times-Free Press:

The intervention, which began last fall, only came to light Wednesday — the result of the public release of a blistering state comptroller performance audit that represented the watchdog agency’s first comprehensive look at the district’s internal controls since it was created in 2010.

Many of the findings don’t look good for the agency created to help low-performing schools. (Note: Full audit HERE)
Continue reading

Comptroller reports on missing government money

News release from state comptroller’s office
Theft and misuse of public money continue to be a concern as outlined in two reports released today by the Tennessee Comptroller’s office.

The 2015 Report of Cash Shortages updates the status of money stolen and missing from Tennessee’s 95 county governments as of June 30, 2015. The report documents money stolen during the 2015 fiscal year, as well as previous fiscal years.

The state’s 95 counties began the last fiscal year with $1,032,456 in cash shortages that had not been recovered. During the fiscal year, $1,069,621 worth of new shortages were detected. Counties were able to recover $1,269,967 through restitution payments, insurance claims or other means. That left a net unrecovered shortage of $832,110 at the end of the fiscal year.

The Comptroller’s office also released its second report detailing cash shortages and other thefts for Tennessee municipalities, internal school funds, utility districts, housing authorities, nonprofits, and other governmental entities. These shortages were reported in fiscal year 2014 and earlier.

Fiscal year 2014 began with a cash shortage of $1,563,137. During the year, $2,546,576 in new shortages were detected. A total of $671,796 was recovered during the fiscal year, leaving an unrecovered shortage of $3,437,917 at fiscal year end. Continue reading

Nashville men indicted for allegedly stealing state grant money

News release from state comptroller’s office:
Two Nashville area men defrauded the state of $62,075 in grant funds while claiming they provided addiction recovery services to deceased and incarcerated individuals. This is revealed in a special investigation completed by the Tennessee Comptroller’s Office in conjunction with the Tennessee Bureau of Investigation.

Clinton Lewis and Andre Trice have each been indicted on four counts of theft by the Davidson County Grand Jury.

Mr. Lewis and Mr. Trice stole the money while doing business as Mount Hopewell Community Development Corporation (Mount Hopewell). Mount Hopewell received funds through the Tennessee Addiction Recovery Program, which is administered by the Tennessee Department of Mental Health & Substance Abuse Services.

Mr. Lewis, who served as president, and Mr. Trice, who served as executive director, filed fraudulent requests for payment for addiction recovery services that were never provided. In addition to several “clients” who were either deceased or incarcerated, other individuals had not received addiction recovery services for years or had never received these services.

The state grant funds were deposited into a bank account controlled by Mr. Lewis. He issued checks totaling $60,445 from this account directly to himself and Mr. Trice for personal use.

To view the special investigation online, click http://www.comptroller.tn.gov/repository/IA/mounthopewellcdc.pdf.

Audit catches theft of funds at Clarksville utility

News release from state comptroller
A special investigation by the Tennessee Comptroller’s Office, in conjunction with the Clarksville Police Department, has found that former materials management technician Tony Hams stole at least $47,518 from Clarksville Gas and Water.

Mr. Hams stole the money over a five-year period by making online personal purchases using a gas and water department purchasing card (P-card). Mr. Hams bought children’s clothing, Oakley sunglasses, health and beauty products, a bow and arrow kit, and many other items for his personal benefit.

Mr. Hams concealed his theft by fabricating invoices and requisition forms. He also logged fictitious items into the gas and water department’s inventory records. All of the personal charges on the P-card were paid with gas and water department funds.

Tony Hams was terminated from Clarksville Gas and Water on January 26, 2016. On June 6, 2016, the Montgomery County Grand Jury indicted him on three counts of theft over $10,000, one count of official misconduct, and ten counts of forgery.

“This theft was allowed to continue for several years because Mr. Hams was responsible for both ordering and receiving inventory items,” said Comptroller Justin P. Wilson. “It is important that supervisors carefully scrutinize invoices and verify that all items that are ordered and received are for legitimate business purposes.”

Clarksville Gas and Water Department officials have indicated they have corrected the deficiencies in the department’s financial processes.

Comptroller finds Luttrell city recorder stealing $120K

News release from state comptroller’s office
A special investigation by the Tennessee Comptroller’s Office has found that former Luttrell city recorder Rebecca Ailor misappropriated at least $120,506 in city money. Ms. Ailor issued more than 140 checks to herself or a family member from September 11, 2012, until February 22, 2016.

Ms. Ailor was able to conceal her theft by falsifying the vice mayor’s or mayor’s signature on city checks. She also recorded the checks as payments to legitimate city vendors, and prepared false documentation to support some of the unauthorized payments. After the Comptroller’s investigation began, she deleted the city’s computerized financial records; however, the city’s financial software vendor was able to retrieve the data.

Ms. Ailor admitted to investigators that she wrote the unauthorized checks for her personal benefit, falsified signatures, and falsely recorded many of the payments in order to hide their true purpose. She told investigators that she needed the money and was trying to make ends meet.

On May 18, 2016, Rebecca Ailor was indicted by the Union County Grand Jury on one count of theft over $60,000 and one count of tampering with evidence.

“It’s important for city officials to provide oversight of the financial process,” said Comptroller Justin P. Wilson. “Not only was one person responsible for issuing checks, recording disbursements and depositing collections, city officials did not review bank statements. This allowed this scheme to go undetected for more than three years.”

Note: The audit report is HERE.

TN gets AAA bond rating from all three national rating agencies

News release from state comptroller’s office
The State of Tennessee now holds the highest bond ratings issued by all three major credit rating agencies. Tennessee’s triple triple-A status reflects the extremely strong confidence the rating agencies have in the State’s capacity to meet its financial commitments.

The State has been informed that it is now rated AAA by Standard & Poor’s Ratings Services. S&P conducted a mid-year review and upgraded Tennessee’s rating from AA+ to AAA. The other two rating agencies, Moody’s Investors Services and Fitch Ratings, have provided Tennessee with their highest ratings of Aaa and AAA, respectively, since 2010.

S&P’s report cited Tennessee’s strengthening economy, growing reserves, positive year-to-date performance, and continuous sound management of its long-term liabilities.

Tennessee’s preliminary unemployment rate for April 2016 was 4.3%, which is below the U.S. preliminary rate of 5%. Additionally, the Tennessee General Assembly recently appropriated an additional $100 million to the state’s rainy day fund, increasing the fiscal year 2017 balance to $668 million.

These first-class ratings will translate into lower interest rates when the state borrows money, and may result in substantial savings for taxpayers. Continue reading

Comptroller: Operator of child nutrition program stole $162,165

News release from state comptroller’s office
A special investigation by the Tennessee Comptroller’s Office has found that Jeannette Jives-Nealy stole $162,165 in federal grant funds. Ms. Jives-Nealy operated Kingdom Dominion Worldwide Ministries, Inc., in Memphis, TN, and received grant funds through the Summer Food Service Program for Children, a U.S. Department of Agriculture program administered by the Tennessee Department of Human Services (DHS). This investigation was completed in conjunction with the Tennessee Bureau of Investigation.

During June and July 2014, Jeanette Jives-Nealy received money for the purpose of providing free meals to children living in economically disadvantaged areas during the summer months. Although Ms. Jives-Nealy claimed she fed thousands of children, investigators determined that all of the money was converted to personal use.

Ms. Jives-Nealy received the grant funds even though they she did not supply any credible documentation to DHS verifying that they were actually acquiring, preparing, and providing food to children. When state auditors asked to review documentation, Ms. Jives-Nealy claimed the records had been destroyed by flooding that had occurred earlier in the day. In October 2014, DHS issued a letter to Kingdom Dominion demanding a full repayment of the grant amount.

On April 26, 2016, Jeannette Jives-Nealy was indicted by the Shelby County Grand Jury on one count of theft over $60,000.

“Whenever a program allows for cash advances, it’s important that program administrators carefully monitor how the money is being used,” Comptroller Justin P. Wilson said. “It is disappointing to learn that such a large sum of public money could be provided without any credible documents to support the feeding of children. The victims in this case include not only taxpayers, but the thousands of children who may have otherwise been fed.”

Note: The full report is HERE. And Sen. Jim Tracy, R-Shelbyville, has sent out a press release declaring the theft would never have taken place if a bill (SB1472) he successfully sponsored this year (along with Rep. Tim Wirgau, R-Buchanan) had been in effect at the time. It’s below. Continue reading