January 20, 2006 The 2001 Audit: Unbelievable! (Part II)

My January 4th post discussed numerous oddities in Hamblen County's 2001 audit.

Before I move on to other audit issues, I want to pose some questions that may arise and add a few additional comments to clarify why the 2001 audit is so odd and useless as a record of county spending.

Question #1: Was it perhaps the practice of the auditors to make adjustments to spending figures at year end in order to create exact spending amounts like those reported in the 2001 audit?

NO. The 2000 and the 2002 Hamblen County audits do not show exact spending amounts anywhere close to the number found in the 2001 audit.

Question #2: Does it really matter whether the actual spending reported in the audit is in the right line item or department?

YES.

Why does it matter?

(1) Because the previous year's spending for a department is typically used to prepare the next year's budget for that department. If you don't have accurate spending amounts for the previous year, then you are trying to draw up a budget with useless information. (Garbage in/ garbage out)

(2) Because the state requires that spending be broken down into departments, categories, and account codes (communication, insurance, salaries, repairs, etc.) in accord with the Comptroller's accounting guidelines and to ensure greater accountability in spending of tax dollars.

(3) Finally, because state law and common sense do not allow commission to pass a lump sum budget appropriation for, say, $10,527,800 and then hand it all over to the County Mayor and his Finance Department to spend as they see fit on the departments of their choosing.

There would be serious weaknesses and a lack of checks and balances in any type of lump-sum budgeting. Standard accounting practices and state requirements provide for at least some level of checks and balances in the process of budgeting and spending county funds.

Appropriations are made by the county commission to departments so it is clear who is spending the money. Each department then has to have a line item budget so it is clear where the money is being spent.

These are basic requirements that promote accountability in spending of taxpayer dollars.

If the line item and department spending amounts are altered at year's end (as was done in 2001) so that they do not accurately reflect the true spending amounts, then the audit report and the spending reports themselves are useless because they are inaccurate.

And what does this mean?

The county wasted $28,000 on an audit that reported inaccurate and altered spending amounts as though they were the true and actual spending amounts for county offices and departments.

As always, if anyone has a comment or question, please send your comment of question by snail mail or e-mail me at noe4accountability@yahoo.com. Include your name, address, and phone number. If you have a concern about political, economic, or any other type of retaliation, you may leave your name off or simply ask that your information and comments be kept confidential.