Wednesday, November 02, 2005

November 2, 2005 Audits: What they tell and what they don't tell

In a previous post on October 28, I mentioned that the Hamblen County Commission decided in October 2002 to have state auditors come in and perform the county's annual financial audit at a cost of $13,000-$14,000 per year and cancelled the financial audit contract that it had with local private auditors at a cost of $31,000 per year.

In my campaign for county commission, contracting with the state auditors to perform the Hamblen County audit was a keystone of my platform, and I introduced the resolution in October 2002 to do just that.

Using the state auditors has had at least two major benefits for the county.

1. The county saves $17,000-$18,000 every year on audit costs-- plus
2. Because the state auditors are experienced in auditing counties, the quality of the Hamblen County financial audit is better today than it was in years past.

But, as noted in the title of this post, a financial audit is by its nature a very limited financial review. A financial audit looks at a small sample of transactions. It does not, and it is not intended to, look at every check, every purchase, every invoice, every receipt, every deposit, every grant, etc.

There are financial audits, performance audits, legal audits, and the like, but there is one thing to remember about all audits: "Trust but verify."

The State Comptroller's Office, the governmental unit that performs the Hamblen County audit, notes in a report that I will briefly quote here that audits are limited and that local government officials are the first and primary line of defense in the prevention of fraud, waste, and abuse at the local level.

"After all, auditors cannot prevent fraud. It is the duty of the people in positions of trust and responsibility, who are given the power by their positions, to protect their organization and the assets provided by the taxpayers from fraud, waste, and abuse. Management, and boards, when part of the structure of an organization, have often tried to avoid these responsibilities by pointing out that they cannot stop what they don’t know. If staff under them decides to act inappropriately, how are they to know? Well, having no knowledge about something is not the same thing as having no responsibility to know.
To effectively fight fraud, it is essential that management take proactive steps to assure themselves that they have made it clear to staff that they are to be apprised of departures from controls or breakdowns of controls. Furthermore, management should monitor the activities of their respective organizations to assure themselves that they are being given accurate information by staff. It should no longer be acceptable for management to say that they just didn’t know what was going on. They may not have actual knowledge, but the test is, what should the management of an organization know about the operations and integrity of their organization? What good-faith steps did they take to obtain pertinent information? What did they know, and how did they utilize that knowledge to meet their responsibilities to the taxpayers?

The excuse from Wall Street to Main Street is always ignorance of the facts. Unfortunately, it has been too easy for responsible parties to turn their heads to avoid seeing the problem. "
State audit #04059, State Dept of Education, Financial Compliance Audit of State Departments and Agencies. The full text is available at the Comptroller's website.
The Comptroller's Office, the very office that performs numerous audits across the state, points out the limitations of audits. The Comptroller is not accusing anyone of fraud, waste, or abuse. He is, however, pointing out that local officials are the first and primary line of defense in preventing fraud, waste, and abuse. And how does the Comptroller say that local officials can act to protect public funds? Ask questions and insist on accurate financial information.
If certain individuals want to attack those who ask questions and who try to verify information and financial data, then I guess they would also attack the Comptroller of the State of Tennessee and common sense.
I will continue to work for the taxpayers. I will continue to ask questions.
Hamblen County must get its financial house in order. Hamblen County must get its debt under control. Hamblen County government must learn to balance a budget and not spend more than it takes in.


Anonymous said...

If you or any other member of the Hamblen County Commission believe Hamblen County Mayor David Purkey or any other county department head has committed fraud, come out and say it.

This device of repeatedly mentioning fraud and county government management in the same sentence, I suppose, is meant to create some sort of guilt by association.

If you have proof of fraud in county government, as a county commissioner, you have a legal obligation to present your evidence to the district attorney or Tennessee Bureau of Investigation.

If you don't have proof, shut your gaping pie hole.

Anonymous said...

I would like to say "thank you" for being one of the most honest elected officials in morristown. You have stood your own and have beeb drug thru the dirt,by David Purkey and his butt sniffers. I hope you decide to run for re-election,the people of morristown need you. Thank you for trying to keep the county out of debt, and for not backing down to David Purkey, Nicole Epps, Gary Chesney,and Carolyn Holt. Im am now one of the proud who take honor in being called a " Linda Noe Cronie".

Anonymous said...

Would that the "anonymous" above objected so strongly to "guilt by association" when practiced and printed by the Citizen-Tribune!

Undoubtedly "anonymous" above has a different label for what the Citizen-Tribune and "Lynch's 8 commissioners" do.

"Anonymous" above doesn't cite one instance where Commissioner Noe accuses (or even hints at) fraud by David Purkey or any county commissioner.

I challenge "anonymous" above to back up her accusations that Commissioner Noe has made any such accusations. Want to take odds that "anonymous" will change the subject.

I think "anonymous" is one of the other names we've seen before, who now lacks the backbone to ID themself.

Perhaps "anonymous" above will tell us why HE/SHE mentions Mayor David Purkey in the same breath (or in this case the same post) with the term "fraud." Is it because Mayor Purkey refuses to attend meetings of the County Audit Committee?

Tim Nunan said...

Keep up the good work Mrs. Noe. Asking the hard questions isn't meant to make friends or enemies but rather to glean understanding.

Public servants should fear questions if they are honestly doing the best they can.

Tim Nunan said...

My last sentence should have read "Public servants shouldn't fear questions..."

Anonymous said...

I never said Linda Noe accused David Purkey of fraud. What I said was Noe mentions fraud and county government management in the same sentence to create guilt by association.

Here's a quote from her latest blog:
"He is, however, pointing out that local officials are the first and primary line of defense in preventing fraud, waste, and abuse."

An apologist for Linda Noe could say she was referencing material generated by the state audit division, and technically, that's true, but the intent seems crystal clear to me.

What's equally clear to me is that Noe knows if she did accuse Purkey of fraud, she'd find herself a defendant in an unwinnable libel suit.

Linda said...

Dear first anonymous comment and most recent anonymous comment,

Let's read again what I said about the Comptroller's comments on the limitations of financial audits: "He is...pointing out that local officials are the first and primary line of defense in preventing fraud, waste, and abuse."

"He" is the State Comptroller. "He" is talking about the limitations of all financial audits--not just Hamblen County's financial audit.

And "he" does in fact say in "his" quote that audits do not detect fraud, waste, and abuse.

The Comptroller tells everyone all across the state:

"...auditors cannot prevent fraud. It is the duty of the people in positions of trust and responsibility, who are given the power by their positions, to protect their organization and the assets provided by the taxpayers from fraud, waste, and abuse."

That's a pretty straight-forward assessment of all audits and of the need for oversight by all local officials.

And that's why all local officials should ask questions and insist upon accurate financial information.

Have a good day.

Anonymous said...

This is in response to sjm's anonymous post (the third post) on this page. In her June 22 post the commissioner writes: "Let's just leave it at this-- Hamblen County was #1 in the state with a total of 29 audit findings (problems, illegalities, criticisms of procedures, missing money) among Tennessee's 95 counties--a #1 ranking that nobody wants!" Also in the same post: "and that the 2004 audit points out that the County Mayor and his office were still violating state law."

While the term "fraud" is not used, the distinction is immaterial.

Now, Mrs. Noe, I expect you (or your Gilbert, AZ based lapdog) to claim that you were citing the State's audit, and therefore those are not your words, but YOU typed them. If you were quoting another, you plagiarized him. You cannot hide behind your claims that you were quoting another when YOU posted the entry. As an attorney, you have an ethical obligation to post only what you can back up or what you truly feel, and to clearly differentiate between the two.

As you have been told before-if you have proof of fraud in county government, you are legally OBLIGATED as an elected official to report it. Do you have proof?

You like to complain of "vicious personal attacks." When will you stop yours? When will you at least acknowledge them? Will you at least admit that the "gentleman" who brought up possible conflicts of interest at the October 20 County Commission meeting was speaking for you? By the same token, do you, yourself, not have a conflict of interest in voting on school matters? You have been at odds with the school system for years.

Finally, what have you DONE for the county in your 3 years? Give a real answer, not "accountability" or "savings" or yet another quote from one of our Presidents or some obscure comic strip from decades ago. What is a thing that you have done for Hamblen County? Something that residents can point to and know that they have Linda Noe to thank.

All you do is say "NO." You offer no solutions to any problems, only negative comments. Any bad idea proposed by your fellow commissioners is better, by far, than your lack of idea.

Mrs. Noe, if you are not part of the solution, you are part of the problem.

Anonymous said...

Get a life, get a job, and stop trying to carry this vendetta to your death bed.
Isn't there something worthwhile for you to do with your time?
Like volunteer at a shelter, cook for the homeless...NO, you want to drag everyone in the school system and government thru your mud.
GET OVER IT. NOE construction didn't get the bid......stuff happens.
Geesh.......I'm tired of reading about you in the paper, but obviously it makes you proud. Some folks may say the only time they want to see your name in the paper is in the obits......hmmmmmm...

watchingyoureveryword said...

Wow...I'm not too sure about that last comment, but some people can't draw the line between public life and personal life. Anonymous has clearly crossed a line and should be careful about anything further that is said. A totally ridiculous and absurd blog not to mention an unnecessary one. Usually those who are protesting the most have the most to hide. Hmmm....? In the future, remember that if you are honest in your dealings, then questions usually don't come up.

Oh yeah, "gaping pie hole" and that comment related to the obituaries are comments that only serve to reinforce what everyone in Hamblen County already knows--David Purkey, Dale Lynch, and those who support them are immature, incompetent, and only able to answer reasonable questions with personal attacks and accusations of vendettas. You just don't like Linda Noe because she makes you realize the shortcomings of Hamblen County and those who manage it. The truth is never easy to swallow, is it?

One other thing...I find it totally ironic that you accuse Linda Noe of constant negativity. Have you looked at your blog comments lately Anonymous? Tsk, tsk...its kind of like the pot calling the kettle black, don't you agree?

Anonymous said...


Let me set your record straight. I am the "anonymous" who refered to Mrs. Noe's constant negativity. That is my only post (except this one). As for calling the kettle black; I call 'em like I see 'em. Mrs. Noe DOES nothing for this county. She offers no ideas, only criticism. She rarely even votes during meetings.

I would challenge Mrs. Noe to back up her repeated claims of "vicious personal attacks" by the Mayor.

Anonymous said...

This is for the "anonymous" above. You wanted to challenge Mrs.Noe about the "vicious personal attacks", If you would actually attend one of the meetings you would see for yourself what actually goes on. Most of the elected officials will vote on something without even reading it. If that is the way you think county government should be ran,then you are wrong. The problem is when something goes wrong people start pointing fingers at Mrs.Noe because everything they read is one sided and all of the blame is going against her.
Tim Woodard

Anonymous said...

watchingyoureveryword said...

Wow...I'm not too sure about that last comment, but some people can't draw the line between public life and personal life. Anonymous has clearly crossed a line and should be careful about anything further that is said. A totally ridiculous and absurd blog not to mention an unnecessary one. Usually those who are protesting the most have the most to hide. Hmmm....? In the future, remember that if you are honest in your dealings, then questions usually don't come up.

Anonymous said...

watching your every word????
This is a public forum....anything CAN be said. She opened the can of worms.
As for immaturity??? Do you even know what that means. A person that can't get passed a hurt, or carries vendettas for that sounds immature.
Being honest, well lets just be honest. Why is this website here? Who on earth reads it? Not people that care about our city or schools, those folks already know the truth. They like to laugh at Linda's obsession. That's what I'm doing here anyway.
As for intelligence???? Who said she was smart? Just because she has a law degree does not make her intelligent. And by the way Linda....did you really pass your boards? Why then aren't you practicing law?
If folks attribute her intelligence and honesty w/being a pain in the butt...then there are plenty of folks out there like that. Anyone would fill that bill.
Linda along with a number of county commissioners are not impressive to me. It's hard to find quality, qualified persons to fill those seats. Who wants to sit up there and listen to their negativity. Have you watched them on TV????? They are the laughing stock of Morristown. Better than a sitcom on some nights.
I think Linda is giving her last hurrah! She knows that she will not be back. She will be beat. There are WAAAY more people in this town that don't like her than do.
So LInda...enjoy your spotlight....I don't believe you'll be back. And like many....we will be smiling.

Anonymous said...

Point of clarification - I posted the comments under "anonymous" about "gaping pie hole." That entry about the obituary crossed way over the line. Clearly, there are at least two people here blogging as "anonymous."

Anonymous said...

I have been involved on the outside edge of Hamblen County Politics for sometime. I assisted Linda Noe, Tom Lowe, and Nancy Purkey in their run for the Commission, to bring change at a time when the School Board's spending was out of hand. I attended each school board meeting and was appalled at one meeting when Mrs. Dean's request for much needed school books was put on hold, but addons to the building program were readily given ( another blog) and Apple ( not Windows based what the real world uses) computers were ordered again at an outlandish price. I have come to respect Nancy Purkey, who I thought in the beginning might be a weak commissioner, but she does something that makes her an excellent commissioner, she is open to comprimise. She listens to all sides. Mr. Lowe, I'm not too sure about, he comes across as someone on the edge of fully comprehending what's going on around him. He comes across as a bigot, or maybe he's just so simple he doesn't get "anchor babies" is a racist remark. I don't care who on Fox, or CNN uses the phrase. And these so call "anchor babies", babies born to illegal aliens in the US, are US CITIZENS, just like Tom Lowe, with the same rights as any US citizen. Linda Noe, I thought would make an excellent candidate, she's well educated, knows the law, a lifelong citized of Hamblen County, former teacher, and somehow it all went wrong. I think maybe if olde records were brought forth from the time when Catron Construction lost the school contracts and why, and maybe even an old copy of Catron's contract to see if there are vast differences that Wild Construction was given that should be questioned by the public in their decision making come next election time for the school board and the County Commission. It would also clear up this vendetta issue. Linda, quit being so negative to everyone, learn to listen to other points of view with an open mind, and comprimise for the good of Hamblen County, not for the good of your ego, or to get a one up on people you're angry with. Also, this Sandra J. Miller, from the Arizona Conservative who keeps blogging on here, why are you getting this woman from Gilbert AZ in our business?
website she is write for site she contributes smaterial to ( another site she contributes to, and note on right name of editor USMC Vet, and follow link to this next page. Scroll down and look at the Anti-Semitic material on page.
If you would like further websites to show the political views of this Arizona woman who's probably never even been to Tennessee let alone Morristown, who's views are apparently so far right she's slipped around and come back in on the left side.
The person to gripe to over the illegal aliens is your congressmen. Only they can change the amdenment that allowed the Supreme Court to order illegal aliens must be educated. More on that later.
Finally there was a comment in witing in a letter before one of the current new seated commissioners was elected to another local citizen and in the letter, he/she states that although saying in their campaigning they would not be for any tax increases, etc, if elected he/she would do so because it sometimes is necessary. And yes I can produce this letter, but will not now as this person has already been elected and it serves no good to Hamblen County to do so at this time. So good job Nancy Purkey, Ricky Bruce, Edwin Osborne, and all the other re-elected commissioners and Joe Spoone who work so hard for Hamblen County without prejudice or bias. As for anyone else who doesn't fit in this category, try harder for us, you were hired to represent us, not yourselves and your prejudiced, biased ideals.

Anonymous said...

Sorry I got your name wrong Nancy. I meant Nancy Phillips in previous post.

SJM--AZ said...

Reply to "Ass-nonymous" (and anyone whose writing (and presumably thinking) is so jumbled and incoherent is wise to remain "Anonymous"):

What on earth are you jabbering about? Nothing is wrong with my posting material on either VDare.Com or AZConservative simply because you disagree with it.

Your only objection would be envy because it's a cinch no one will ever pay you for writing when you use phrases like "website she is write for."

As for your comment "site she contributes smaterial to," you give poor website directions as well as jabbering incoherently. That URL is locked; one must click on "archives" from the menu bar or the higher-level blog page.

Where is your proof that I write for that website? What proof do you have that I'm USMC_Vet (at least that's what your incoherent jibberish seems to suggest). Is the link to WordUnheard from USMC_Vet the reason you claim I write what you term anti-Semitic materical there, but that claim of yours is as foolish and unfounded as everything else you say.

I'm sure it won't matter that I've never posted on the bsradioblog, because you seem to care nothing about facts. I defy you to either prove that I've posted on that blog or retract your false statement and apologize. When you make such false statements, you'd be wise to continue withholding your name to protect yourself from defamation suits.

A very cursory perusal of WordUnheard looks like its a soldiers' blog. There may be posts that you in ignorance would call "anti-Semitic," but I won't waste time looking for it--you'll have to specify the location clearly.

What even further betrays your ignorance is accusing me of posting "anti-Semitic material" when I'm a donor to Magen David Adom (and I'm positive you don't even know what MDA is).

And where on earth did you get the foolish notion that I'm in Gilbert, AZ? Perhaps previous posters said it and you were foolish enough to believe them when they're just as ignorant and uninformed as yourself.

Another example of your ignorance and poor writing: "the amdenment that allowed the Supreme Court to order illegal aliens must be educated."

It's spelled "amendment," Ass-nonymous, and the Supreme Court doesn't given "amendments," they hand down verdicts which become case law. There is no such "AMDENMENT,"

Actually, Ass-nonymous, your dislike of Linda Noe and Tom Lowe are compliments because you at least get their names right.

That you classify Nancy (Purkey) Phillips with Bruce, Osborne and Spoone is no compliment to Mrs. Phillips.


And last, Ass-nonymous, the commissioners were ELECTED, not "hired." Your total ignorance is a real hoot.

Luckily there are many intelligent people to offset the votes of the ignorant.