Monday, January 30, 2006

January 30, 2006 The 2002 Audit Bottom Line: The county spent $923,000 more than it took in

As I continue to report on Hamblen County audits starting with the year 2001, we move to 2002 with this reminder. County financial audits have a certain usefulness, but they are very limited in scope and they are not designed to detect fraud, waste, or abuse, according to the State Comptroller's Office--the state department that monitors all audits of county government.

The title of this post tells the big headline story for 2002.

According to the 2002 audit (the last one performed by the private, local auditors), the county spent $923,000 more than it took in.

Unfortunately, there was nothing new about the county spending more than it took in---in fact, going all the way back to 1992, 2002 was the 7th year that the county spent more than it took in.

One dramatic difference, however, was the size of the deficit---$923,000. The previous high deficit was $815,666.

Another dramatic difference was that with this huge deficit, the county ended up with its lowest fund balance as of 6/30/02-- an ending fund balance of just $389,568.

The third important item to note is that the county found itself in this financial mess less than three years after a wheel tax was started "to build up the general fund balance."

There was only one major finding or accounting irregularity reported in the audit and that was to state that the Finance Department spent more than county commission had appropriated out of the General Fund, Garbage Fund, and Highway Fund. This is a violation of state law.

(This one reported finding by the local auditors will contrast dramatically with the 29 reported "findings" in the next year's 2003 audit that was performed by state auditors at a significant financial savings to the county and that will be the subject of a future post.)

The local auditors also stated that Hamblen County operated on a cash basis in 2002 when officials should recognize that "Hamblen County is required to report on the modified accrual basis." Accrual is an accounting term that in general means that you put income and expenses in the year where they belong even if you haven't yet received the income or written the expense check.

The reply to this audit finding from the Finance Department was that Hamblen County had "consistently" been using the cash basis of accounting in previous years.

So why hadn't this problem been reported in prior audits and corrected?

These two statements seem odd.

Did the auditor tell the County Mayor and the Finance Department during the many prior years that he had been performing the county audit that they were required to operate on the modified accrual basis?

1. If the auditor did tell the county repeatedly that it must operate on the modified accrual basis, why did the county (according to the Finance Department) say it had "consistently" been using the cash basis of accounting instead?

2. If the auditor did not tell the county that it was required to report on the modified accrual basis during the many prior audits, then why did he suddenly bring this up in the 2002 audit?

More on 2002 next time.

Any comments may be sent to If you would like to have your comments published, please include your name, address, and phone number for contact and verification.

Friday, January 20, 2006

January 22, 2006 2001 Spending Reported to/by the Tribune

Before you read this post, it would be helpful to review previous posts of January 4th, 20th, and 22nd for background information on county spending figures as reported in the official 2001 audit.

This is the text of an article that appeared in the Citizen-Tribune on April 16, 2002.

The 2002 primary elections were about 3 weeks away.

The article refers to and compares county spending in 1997 and in 2001 (the year that the audit of county spending showed hundreds of end-of-year adjustments).

The headline is shown in red.

Purkey: County Spending within Bounds
Tribune Staff Writer

Political candidates and interested bystanders who say Hamblen County government spending is out of control are wrong, county officials say.

Between 1997 and 2001, expenditures on county government-- not counting the school system-- grew at a slower rate than the rate of inflation, Hamblen County Executive David Purkey reported Monday afternoon.

During that five-year period, county government grew by 5.8%. In the same period, the inflation rate was 8.5%, according to statistics compiled by Trustee Bill Brittain.

"The answer is the management of money," Purkey said. "It's very simple. I get real upset when I hear people in the community and candidates who are running against us wail and gnash their teeth about spending being out of control. That's not true. We do a lot of things here in the courthouse and in county government to share duties. Employees are being shared."

The audited numbers indicate that the 1997 non-school budget was $14.1 million. The non-school budget in 2001 was $14.8 million. Purkey's comments came at a county commission work session Monday afternoon.

The school system's budget is not included in the report because it has its own board that decides how money should be spent. Also, once the county commission allocates money to the school system, the county commission has not spending oversight function.

The numbers take into account general-fund expenditures, garbage and highway funds and debt service, including the initial debt service on the $34.7 million school spending program, according to Brittain.

"They tell me that spending in county government is out of control as the accusations have been made," the trustee said. "We're providing quality service for a reasonable price. It insults me for people to go out there and say that spending is out of control when every day we try to find ways to be more efficient and save money."


If you automatically accept the statement in this front-page "news" article that 2001 expenditures were $14.8 Million without any checking or verification, then you would think that county spending increased by only $700,000 (5.8%) between 1997-2001.

But if instead you decide to check and verify the 2001 expenditures by actually looking at the 2001 audit, you will find that the total of 2001 audited expenditures for those four funds is approximately $16.5 million (not $14.8 million as reported).

I put out this information with a cautionary note: Questions about the difference in the 2001 reported spending and the 2001 actual spending have been asked and ignored. A citizen told the entire commission that she had asked County Mayor David Purkey to tell her what the true total of 2001 audited spending really was in the four funds. No response other than a threat to sue her.

My expenditure total of $16.5 Million is based on the total of expenditures for each of the four funds as found in the 2001 audit. (The expenditure total as shown in the audit would be even higher, but I deducted the amount used to pay back tax anticipation notes at the end of the year).

After you review the audit, everything that was said and reported to commissioners and to the public changes significantly.

County spending appears to have increased by $2.4 million (not $700,000 as reported).

County spending appears to have increased by 17% (twice the rate of inflation and not the 5.8% increase that was reported) jumping from $14.1 Million to $16.5 Million.

"Trust but verify" applies everywhere.

Nowhere is verification more important than in situations where the government or government officials are providing the facts and figures and have a vested interest in what is reported and how and when.

Political spin ---taking actual facts and actual figures about 2001 county spending and "spinning" them to present the best possible appearance--is one thing. That's a bit like the expected "huffing and puffing" by a car dealer in describing the vehicle he has for sale.

But why are incorrect facts and figures about 2001 county spending put out publicly to the commission, to the press, and to the citizens of Hamblen County nine months after the 2001 fiscal year had ended?

What is the correct figure? Is it $16.5 million? Or is there something that doesn't show in the audit?

Everyone makes mistakes. Small ones are usually ignored. I have certainly made my share of mistakes.

But what exactly was going on in 2001 in connection with Hamblen County finances?

Surely at some point truthfulness about the county's finances is important. Was the audit wrong? Is there an accurate record anywhere of the county's expenditures in 2001?

The next post will be about the 2002 audit, the last audit by the local, private auditors. At the end of fiscal year 2002 on 6/30/02, the county showed its largest spending deficit since 1992 as the county spent $923,000 more than it took in.

And isn't it ironic that this huge $923,000 deficit came on 6/30/02 ----- just 10 weeks after Tribune headlines trumpeted that county spending was "within bounds"!

January 22, 2006 The 2001 Audit--An Official-looking Stamp of Approval to Altered Records of County Spending

Recent posts (Jan. 4th and Jan. 20th) have discussed the 2001 Hamblen County audit with its unbelievably high number of end-of-year alterations and adjustments to county spending records and the odd way these "adjustments" made total spending on numerous items appear like it was exactly what had been budgeted.

The taxpayers paid $28,000 for this audit and in return got a financial report that gave an official-looking stamp of approval to a meaningless and extensively altered record of county expenditures.

Detailed audit information and examples of how expenditure numbers were altered and manipulated in 2001 are already outlined in January 4th and January 20th posts.

Certain statements will be made by various officials and others about these posts. Probably the statements will be that this is no big deal or that making changes at year's end just so it will look like exactly $35,000 was spent on electricity or exactly $72,000 was spent on insurance is standard operating procedure for the county or for the auditors.

Well, what happened in the manipulation of county spending records in 2001 was not standard operating procedure for the county or for the auditors. There are some year-end adjusting entries for all years, but not adjustment after adjustment after adjustment to add or deduct an amount just to make the expenditures seem exact (and meaningless).

I took 7 categories/departments at random for 2001 and found approximately 90 end-of-year adjusting entries. I looked at those same 7 categories/departments in 2002 and found not one end-of-year adjusting entry.

The county's record of expenditures should not be contrived records that have been altered by hundreds of end-of-year adjustments that simply pull out a number ($11,289.42) and add it to spending here or pull out a number ($41,455.21) and subtract it from spending there-- all apparently to make certain departments look better and to shift expenses from the department or category where they were incurred to some other department or category.

A financial record should provide, at a minimum, at least a close record of actual expenditures for each department and for each line item within the department.

Because all the alterations in the 2001 audit seemed to make it a meaningless, but expensive ($28,000), record of county finances, I asked an individual who was involved in the audit process why there were huge numbers of adjusting entries in 2001 that made the expenditures come out even time after time after time. I also asked this same individual in the county finance department whether the expenditures shown in the 2001 audit provided an accurate record of actual spending in 2001.

I was told that this person did not want to answer either of those questions because the answers to those questions might reflect "badly" on someone.

Well, sometimes the answer you don't get reveals just as much or more than the answer you do get.

If you are afraid to answer the question 'Does the 2001 audit provide an accurate record of actual spending in 2001?', then your refusal answers that question loudly and clearly.

And what was being said by county officials about 2001 spending at the time? That will be the subject of the next blog post quoting an article that appeared in the Citizen-Tribune.

January 20, 2006 Some thoughts on local politics and conflicts of interest

Local politics, laced with rumors and the occasional factual comment, is like a long-running TV soap opera.

To get elected:

Talk conservative money management... Then tax and spend or borrow and spend after the election.

Talk about controlling spending... Then vote for every additional spending proposal that comes around after the election.

Talk about conflicts of interest, ethics, openness, and restoring citizen confidence in government... Then proclaim, after the election, that there are no ethical conflicts of interest in voting on funding issues where your wife, husband, son, daughter, brother, or sister is involved.

The plot line of this political soap opera is always the same---get power, get money, get control of tax dollars, and then spend, spend, spend as you dole out favors and jobs to friends, family, and the well-connected to build your political kingdom and your political security.

Oftentimes, large segments of the voting public are not even aware of all the interconnected power relationships--both business and family--that affect how the people's money is spent.

There are a lot of conflicts of interest in the local political world, and they are being discussed.

Thankfully, the emphasis on ethics at the state level appears to have increased concern and awareness of ethical conflicts of interest at the local level.

People are starting to notice and to talk more openly about conflicts of interest and the way these conflicts seem to affect hiring decisions, appointments, and votes.

The "conflict-of-interest" issue was brought up at a county commission meeting on October 20th when a gentleman asked Chairman Joe Spoone and commissioners Herbert Harville and Ricky Bruce to refrain from voting on a school issue because of their close family and economic ties to the school system.

The most serious conflict-of-interest allegation involved Commission Chairman Joe Spoone. Commissioner Joe Spoone is the brother of School Board Chairman Carolyn Spoone Holt.

In fact, School Board Chairman Carolyn Spoone Holt had appeared before commission (and before her brother Joe) prior to October 20th to ask for additional money from the county to start a new International School for Hamblen County students who don't speak English or who have limited English ability.

Carolyn Spoone Holt's public plea to her brother Joe Spoone for more public money is just the tip of Joe's many conflicts.

Joe Spoone actually has three financial and ethical conflicts of interest when school funding issues come before the commission.

Ethical conflict #1 is that Joe Spoone's sister (Carolyn Spoone Holt) is a member of the school board and current school board chairman.

Ethical conflict #2 is that Joe Spoone's brother (James Spoone) is employed by the school system as a bus driver.

Ethical conflict #3 raises the most significant concern about Joe voting on school issues. Joe Spoone's wife (Charlene Spoone) is employed by the school system as a technology assistant.

Since James Spoone and Charlene Spoone are not teachers, they do not have the protection of tenure in their employment. They can be fired or their positions can be eliminated.

Now if Charlene Spoone is concerned about her employment with the school board, her pay, or her benefits--all of which benefit Joe as well--would she mention these concerns to her husband Joe Spoone in discussions at the dinner table, at family gatherings, and around the home?

On October 20th, a citizen asked Joe to refrain from voting on the International School and on all school funding issues because of Joe's ethical and financial conflicts of interest.

Joe denied the obvious ethical conflict of interest and voted in favor of using county dollars to help start an "International School" just like his sister had asked.

Many people spoke at the October 20th meeting and made a simple request that county funding of the International School be put on a public referendum during the already scheduled May 2006 primary elections.

The voice of the people in regard to the International School, however, will not be heard in a referendum.

Joe Spoone, despite his financial and ethical conflicts of interest where school issues are concerned, cast the 8th and deciding vote ensuring that the International School will become a reality next year.

This reality also means that significant future costs will be incurred by Hamblen County taxpayers in continuing and maintaining this new school instead of using existing classroom space to serve these students.

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?


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 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.

Wednesday, January 04, 2006

January 4, 2006 The 2001 Hamblen County Audit: Unbelievable!

Hamblen County, like all counties in the state of Tennessee, is required to have a financial audit performed each year.

I have discussed audits periodically. Now it’s time to look at our recent county audits—starting with the 2001 Hamblen County audit.

If you have attended commission meetings or watched them on cable TV, you may have heard County Mayor David Purkey label the county audit as our “financial Bible” as though it is the final and accurate source of information about county finances.

In light of what I will present here about the 2001 county audit, it is unlikely that anyone could or should ever consider Hamblen County’s audit as a financial Bible or as an accurate source of information.

With Enron, Worldcom, and other auditing scandals, it is unlikely that the general public (or even auditors themselves) would make a sweeping claim of financial accuracy and infallibility when they know that a financial audit, such as the one performed for the county, is only a review of a small sampling of transactions along with a review of some county commission minutes and a review of compliance with a number of state laws and regulations.

Financial audits, as the Comptroller of the State of Tennessee has stated, are limited in scope and are not intended to detect fraud, waste, or abuse. (See my post of November 2, 2005, quoting the State Comptroller’s Office).

NOTE: While auditors do not look for fraud, waste, or abuse, it is possible that a financial audit, if it just happens to review a questionable transaction among its regular small audit sampling, might make a report of that transaction for further review and additional audit work.

There are a number of people who have been told and who perhaps believe that surely an audit at least provides accurate income and spending records for departments and agencies of county government.

County audits have a function, but the State Comptroller has noted that the function is very limited.

Accounting scandals involving huge companies that were "audited" by top-notch auditing firms indicate that financial audits are only as good and thorough as the auditor, only as complete as the number of transactions that are reviewed, and only as accurate as the information that is provided to the auditor by the county government.

If you take even a brief look at the 2001 county audit (for which taxpayers paid about $28,000 to the previous local private auditors), you will see that the auditor either ignored or encouraged the presentation of useless and false “spending records.”

The spending records provided by the County Mayor, as the county’s chief financial officer, to the auditor in 2001 have been manipulated and altered through multiple adjustments at the end of the year, and the use of these records in preparation of the official county audit of actual spending makes a mockery of the concept of financial accountability.

The 2001 audit is full of spending records that have been purposely altered and adjusted and manipulated at year end apparently for two reasons: (1) to make it appear to the Commission and to the public that numerous spending totals as of 6/30/01 were exactly the same as the perfectly even spending amounts that had been budgeted; and (2) to shift spending amounts around to control spending amounts that were reported for various departments.

Certain year-end audit adjustments are normal--such as when one finds that gasoline has mistakenly been paid out of an insurance line item.

However, what are termed “adjusting entries” in the 2001 audit are more appropriately termed “audit manipulations” in my opinion. The manipulation of line item after line item with these adjustments at the end of 2001 fiscal year (6/30/01) led to the presentation of false and misleading records and reports of county spending within departments.

Here are just a few of the approximately 80 examples of exact spending amounts from the 2001 audit:

Election Commission:
Exactly $1,500 budgeted for travel; exactly $1,500 spent.
Exactly $1,500 budgeted for office equipment; exactly $1,500 spent.

Planning Commission:
Exactly $2,000 budgeted for gasoline; exactly $2,000 spent.
Exactly $7,900 budgeted for office equipment; exactly $7,900 spent.

County Courthouse (buildings):
Exactly $35,000 budgeted for electricity; exactly $35,000 spent.

Property Reappraisals:
Exactly $4,000 budgeted for legal services; exactly $4,000 spent.
Exactly $3,500 budgeted for postal charges; exactly $3,500 spent.

Juvenile Court:
Exactly $3,500 budgeted for evaluation and testing; exactly $3,500 spent.
Exactly $1,000 budgeted for travel; exactly $1,000 spent.
Exactly $2,800 budgeted for office equipment; exactly $2,800 spent.

Sheriff’s Department:
Exactly $70,500 budgeted for health insurance; exactly $70,500 spent.
Exactly $4,000 budgeted for other equipment; exactly $4,000 spent.


Exactly $15,000 budgeted for overtime pay; exactly $15,000 spent.
Exactly $72,000 budgeted for health insurance; exactly $72,000 spent.
Exactly $5,000 budgeted for other supplies/mtls; exactly $5,000 spent.
Exactly $6,500 budgeted for other charges; exactly $6,500 spent.

I could go on and on, but anyone with common sense can see what’s up. If anyone thinks that you can budget to the penny and then end up with exact spending totals with absolute, to-the-penny accuracy as shown in the above sampling of audit entries, then I have lots and lots of swamp land in Arizona to sell you.

Just how did the county end up with these "perfect spending” numbers? Through end-of-year manipulation of spending records—manipulations that were given the name “audit adjustments” or "adjusting entries."

Here are two examples of "adjusting entries" that were made at the end of the fiscal year (6/30/01) by the Finance Department in the Office of the County Mayor to make spending amounts appear exact (but inaccurate) in the 2001 audit:

Jail Insurance was $104,284.42 as of 5/25/01.
Then on 6/30/01 there are two entries. One is an adjusting credit entry of $43,573.84. The other is a debit entry of $11,289.42.

$104,284.42 – 43,573.84 + 11,289.42 = exactly $72,000.00 reported as jail insurance costs in the 2001 audit

County Courthouse (buildings) Electricity was $41,455.21 as of 6/8/01.
On 6/30/01, there is an adjusting credit entry of $6,455.21.

$41,455.21 – 6,455.21 = exactly $35,000.00 reported by the auditor as electricity costs in the 2001 audit

When have your household electricity, insurance, travel, or gasoline costs ended up exactly $1,500, exactly $2,000, exactly $6,500, and on and on?

Now about that 2001 Financial "Bible"?

Who manipulated the actual spending records for the General Fund at the end of the year and why? Who gave the financial information to the local, private auditors to report in the audit?

How could an auditor accept and report these obviously manipulated spending numbers as the "actual" record of department spending?

What did each department really spend on these line items and what was the real total of spending for each department?

No wonder the county had deficit spending in 8 of the 12 years from 1992-2003. Apparently, no one was told and no one ever knew what had really been spent in the previous year! And no one asked!

And the County Mayor tells the public that the Hamblen County audit is the source of accurate financial information about the county's finances?

And the County Mayor tells the public that the audit is the county's financial Bible?

More on 2001 tomorrow.

It has not been a pleasant experience in finding out what has been going on. It is very difficult to put this information out. I used to have a great deal of trust in people, and I thought that elected leaders always had the interests of the public and taxpayers foremost in their thoughts.

Now I know that you should continue to have a level of trust in people, but you better verify everything just to be sure that you are not surprised down the road.

As I start on this series, I am prepared for the personal attacks that are inevitable whenever the truth is told about county finances.

I just hope that those who always explode with anger and pent-up rage and personal attacks will count to 35,000 (exactly the number of dollars reported as spent on electricity in the 2001 audit) before they explode.

Hamblen County is in difficult financial times. Our financial problems can be solved, but our ability to find solutions is limited unless we face the truth of what has happened and face our problems with that knowledge.

A willingness by all parties to co-operate in measures that promote accountability and that control spending would be a good first step. A willingness to provide accurate financial information to the county commission and to the public would be an excellent second step. And a willingness to address and deal with facts and not personalities, while avoiding rants, would be a nice idea, too.

Tuesday, January 03, 2006

January 3, 2006 Those who ask questions need not apply

Today's post will touch on a certain change in committee membership made by Commission Chair Joe Spoone in November 2005.

Commission Chair Joe Spoone, who is the brother of school board chairman Carolyn Spoone Holt, revised the Hamblen County Commission committees effective with the November committee meetings.

There was one committee where only one change was made. Chairman Joe Spoone removed me from the Audit Committee.

Before I was ever elected to county commission, I did research about county finances.

I ran for office because of my extensive research and concerns about county finances, school finances, deficit budgets, questionable bidding procedures, rising taxes, and the overall lack of accountability for the spending of tax dollars.

I am a fiscal conservative. I have encouraged spending reductions where possible, and I have refused to support deficit budgets.

Despite the depth of my research and my knowledge about county finances and audits, Joe Spoone took me off of the county's Audit Committee.

The previous members were Edwin Osborne, Maudie Briggs, Herbert Harville, Ricky Bruce, and Linda Noe.

The members now are Edwin Osborne, Maudie Briggs, Herbert Harville, Ricky Bruce, and Larry Baker.

I did not ask to be taken off of the committee. In fact, I had e-mailed Chairman Joe Spoone on October 5, specifically asking to be left on the Audit Committee as well as the other committees that I served on. Since I had asked to be left on but was removed anyway, I called Commissioner Baker, my replacement, to see if he had perhaps asked to be put on. He hadn't.

So what happened between October 5, when I asked to be left on the Audit Committee, and November, when I was removed from the Audit Committee? Well, there was a commission meeting on October 20th where Joe Spoone got really bent out of shape after comments were made about his multiple conflicts of interest in voting on school issues.

Joe got very upset at the start of the October 20th meeting when a gentleman from the audience brought up Joe's almost never-ending conflicts of interest, family relationships, and economic ties to the School Board.

After pointing out that Joe Spoone's wife (Charlene Spoone) is a school system employee, that Joe's brother (James Spoone) is a school system employee, and that Joe's sister (Carolyn Spoone Holt) is chairman of the School Board, the gentleman asked Joe (along with Herbert Harville and Ricky Bruce who also have close family ties to the school system) not to vote on a school issue that was in front of commission at that meeting and not to vote on school issues at future meetings because of ethical, family, and economic conflicts of interest.

Joe got mad again later in the same meeting when I commented that I agreed with the gentleman's statement that Joe has ethical and economic conflicts of interest in voting on school issues because of not just one, but at least three close personal, family, and economic ties to the School System.

Questions about Joe's conflicts of interest are actually nothing new. They've been raised before by various people and even by other commissioners.

If Joe really believes in his heart that he has no ethical, personal, family, or economic conflicts in voting on school issues with his sister Carolyn Spoone Holt serving as chairman of the School Board and his brother James Spoone and wife Charlene Spoone employed by the school system, then Joe just needs to keep saying that all his family and economic ties to the school system have no effect on him or on his vote whenever a school funding issue comes before commission.

Joe really doesn't need to get mad at those who have a different opinion. The gentleman who spoke about Joe's conflicts (Mr. Dollar) didn't say, and to my knowledge no one is saying, that Joe shouldn't be a commissioner just because of all his conflicts.

All that anyone has said is that it must be impossible, or awfully difficult, for Joe to push aside all thoughts of his wife, sister, and brother and try to forget all of his economic ties to the school system when he votes on school issues.

All Mr. Dollar said was that when there are school issues before the commission, maybe Joe shouldn't vote--to avoid even the appearance of the conflicts of interest that are so obvious to everyone.

I don't know if taking me off the Audit Committee is related to my questioning Joe's apparent conflicts of interest on October 20th. Joe never did call or e-mail me to discuss my October 5th e-mail to him with my request to remain on the Audit Committee.

Taking me off the Audit Committee and putting somebody on who has no interest in that Committee--well, it does make you wonder. Getting taken off the Audit Committee shortly after I said what everyone else knows (Joe Spoone has ethical and economic conflicts of interest in voting on school issues)--well, the timing does make you wonder. But, hey, that's fine.

I'll still attend, ask questions, and provide information at Audit Committee meetings (if there are any).

I'll still ask questions, I'll still be open, and I'll still provide information to the public like I always have.

I will continue to be a watchdog for taxpayers.

I will continue to protect and check on the spending of taxpayer dollars... whether or not I'm a commissioner and whether or not Joe Spoone allows me to serve as a member of the Audit Committee.

I will support paying down the county's debt instead of saddling our children and grandchildren with more and more debt payments.

I will not be a rubberstamp for more and more spending.

I will not be a supporter of higher taxes and deficit budgets.

In singling me out, I guess Joe just didn't realize that other commissioners and citizens make comments about Joe's conflicts of interest all the time--they just do it behind Joe's back.

Because Joe couldn't challenge or refute the truth of what Mr. Dollar had said about Joe's conflicts of interest in voting on school issues, Joe pulled out the old "attack the messenger" trick from the political dirty tricks bag.

But Joe didn't have the guts to attack Mr. Dollar who had brought up Joe's conflicts of interest.

So in response to questions about Joe's conflicts of interest, Joe didn't say that he had no conflicts. Instead, Joe ran to the Tribune to talk about my insurance plan.

Well, the facts are quite simple, but Joe left a bunch of them out.

Six commissioners are covered under the county's insurance plan: Larry Baker, Doyle Fullington, Tom Lowe, Linda Noe, Nancy Phillips, and Bobby Reinhardt.

Joe Spoone apparently had individual coverage under the county plan for about 16 months from about March 2003 to June 2004 and is now covered only under the government-provided school insurance plan of his wife Charlene as her dependent.

The article wasn't clear on whether Joe was covered under two plans (his individual county plan and his wife's school plan) for 16 months before he finally dropped his individual coverage under the county plan or whether Joe was covered only under the county plan for 16 months while his wife Charlene carried health insurance for herself and their children (but not Joe) for that 16 months before Joe finally dropped his county plan and was added as another dependent under Charlene's school health insurance.

Joe didn't mention, and the reporter didn't report, that three commissioners --Guy Collins, Donald Gray, and Herbert Harville-- don't carry county insurance because they are already covered under government-provided Medicare insurance.

Joe didn't mention, and the reporter didn't report, that another commissioner--Dennis Alvis-- is a city government employee who doesn't carry county insurance because he is already covered under the city government insurance.

Apparently 11 of the 14 commissioners, including Joe Spoone, are covered by some sort of government insurance.

So why was Joe talking about insurance and insurance plans? The issue was school-commission conflicts of interest where commissioners have moral or ethical conflicts of interest in voting on school issues because of their family and economic ties to the school system.

Now, if I or any other commissioner had a spouse employed by the school system (like Joe does), then I could see where Joe would run to the paper and cry "foul" about my comments about his school-commission conflicts of interest.

If I or any other commissioner had a brother employed by the school system and a sister who was school board chairman (like Joe does), I could see where Joe would run to the paper and cry "foul" about my comments about his school-commission conflicts of interest.

If I or any other commissioner had insurance coverage through my spouse's insurance with the school system (like Joe does), I could see where Joe would run to the paper and cry "foul" about my comments about his school-commission conflicts of interest.

But I don't have the specific and multiple conflicts that Joe does. So why did Joe run to the paper with a story that wasn't even about the school-commission conflicts of interest that Mr. Dollar brought up?

Maybe Joe just wanted to confuse things and get the discussion away from the real issue and the facts that Mr. Dollar stated so clearly: Joe Spoone has personal and ethical conflicts in voting on school issues.

Having insurance never was the issue--except in Joe Spoone's situation where the insurance is a part of bigger and multiple school-commission conflicts of interest.

With Joe Spoone, his wife's employment by the school system creates a conflict.

With Joe Spoone, his brother's employment by the school system creates a conflict.

With Joe Spoone, his sister's position on the school board creates a conflict.

With Joe Spoone, his conflicts in voting on school issues are all over the place.

joe's wife Charlene is employed by the School System. Her income and benefits such as insurance, retirement, etc. are received by the Spoone household and benefit Joe Spoone.

Joe Spoone's ethical and economic conflicts of interest in voting on school issues are there for all to see.

Joe Spoone is mad about any public mention of his conflicts of interest. Why? Because they are true. Because they are obvious. And because they can't be denied. And, in my opinion, Joe's anger has got the best of him.

Maybe Joe's anger prompted him to remove me from the Audit Committee or maybe it was just coincidence that he removed only me from the Audit Committee right after I spoke out about his conflicts of interest.

Regardless, I hope that the new Audit Committee will meet sometime soon, and I wish it well. The old Audit Committee just quit meeting after an August 2005 meeting where the County Mayor stated that he would not answer 2004 audit questions, among which were questions about his actions in switching money from fund to fund without getting commission approval as required by state law.

There's a lot to do if anyone is paying attention. There's a lot to do if anyone has the courage to tackle the problems that plague our county finances.

January 4, I will start a multi-part blog series on our county finances, and I will start with a look at recent county audits. Here is just a small preview of the information that will be provided.

Although I was not on county commission during the 2001 audit year that ended 6/30/01, I reviewed that audit. I am not a CPA, but frankly it doesn't take a CPA to spot the obvious falsity and the manipulation of county spending records and other questionable reporting in the 2001 audit.

This is why the statement "trust but verify" should be the policy of the Hamblen County Commission and of the citizens and taxpayers of Hamblen County.

Although I was not serving on county commission during the 2002 audit year that ended 6/30/02, I have reviewed that audit. I am not a CPA, but frankly it doesn't take a CPA to spot serious problems when your chief financial officers are telling the public that county finances are OK in April 2002 (Citizen-Tribune article by Robert Moore, headline "County Spending Within Bounds" April 17, 2002) and then when you get the audit for the fiscal year ending June 30, 2002, you find that actually the county spent $923,000 more than it took in.

If county officials thought that spending $923,000 more than you were taking in meant that county spending was "within bounds" in 2002, then you have to wonder what county financial reports really mean.

In that same article it was reported that back in 2001, the audited spending in the county's four major funds (excluding schools) was $14.8 million dollars. That was false. The 2001 audit actually reported that approximately $16.5 million had been spent in the county's four major funds (excluding schools).

In other words, about $1.7 million dollars more had been spent in 2001 than the county officials were reporting. I guess the paper decided to just trust and forgot to verify the factual information it was given and was reporting.

That is why the statement "trust but verify" should be the policy of the Hamblen County Commission and the citizens and taxpayers of Hamblen County.

In the upcoming blog series, I will start with a look at the 2001 audit and then proceed to a review of the 2002 audit, an audit that showed the County with its largest deficit spending in recent history (going back as far as 1992).

How can you have more money and revenues and still end up in the hole--again?

By spending more than you take in--again.

Then we'll move to the 2003 audit, the first audit performed by state auditors. Before I took office, the previous commission had tricked the public ("pick your poison") into approving continuation of the temporary wheel tax. The previous commission, in its last official act in August 2002, then approved a 15-cents property tax on top of the wheel tax extension.

Despite the continued wheel tax revenue and new property tax money, when the new auditors came in to audit the county's books on June 30, 2003, they found that the county general government fund was "broke."

The only reason you didn't hear reports that the county was "broke" on June 30, 2003, was because the state auditors allowed money to be moved from several small side funds into the general fund to get the general fund out of the red.

If the state auditors had not approved dumping money from these other funds into the county government general fund, then the county general government fund would indeed have been officially, instead of unofficially, "broke." Wonder what that would have done for the county's bond ratings?

As it was, even with money from other funds being dumped into the General Government Fund, the General Fund on June 30, 2003, was at its lowest level since 1992.

If you are a voter and a taxpayer, it may be hard to understand how the county could have been in its worst economic position ever on June 30, 2003, when the wheel tax had just been extended and when the old county commission had just passed a 15-cent property tax increase in August 2002 on top of the wheel tax extension.

The answers are simple:

The county spent more than it took in--again.

Revenues increased, but spending increased even more--again.

In January and February, a lot of people will be going to the Courthouse to pay their property taxes. If ever-increasing taxes bother you, if your tax bill is higher than in previous years, if you are concerned about accountability and ethics and openness in government, I invite you to return to this blog in 2006 and see what has been, and is being, done with your money.

I will continue to put forth proposals to provide for more accountability, more openness, better oversight of county spending by county commission, clear identification of county vehicles (other than undercover vehicles), broader citizen involvement on committees and boards, and accurate inventories of county taxpayer property.

It has been difficult, expensive, and time-consuming to get a lot of the financial information that I have. It has required a lot of time to sift through the many documents and reports. But the taxpayers and citizens of Morristown and Hamblen County foot the bill, and they have a right to know how their money is spent.

Whether you're a commissioner or a citizen, you have the right to get government documents, you have the right to know how your money is spent, and you have a right to insist on straight answers from your government.

Monday, January 02, 2006

January 2, 2006 A New Year and Lots of Information for the Public

Happy New Year!

2006: A new year and a new date to remember to print or type on checks and letters. It's always a struggle to do this at the start of the new year. You've just spent 365 days putting "2005" on checks and letters and suddenly you have to switch dates.

Although there's a new date on this blog, the focus of noe4accountability will remain the same---protecting county dollars and promoting accountability and openness at every level of government.

As I have done at committee and commission meetings, this blog will offer commonsense suggestions for improving the financial status of Hamblen County and increasing accountability for the wise spending of county dollars.

If you have suggestions for a topic or if you wish to make a comment, please submit your idea or comment by e-mail to or you can mail your suggestion or comment to 2343 Joe Stephens Road.

Please be sure to include your name and address and phone number in any communication.

The only exception to the requirement of name, address, and phone number would be where you have knowledge and facts (no rumors) to share about a problem area in county government or where you have a suggestion to improve the functioning of local government but you are concerned about potential retaliation if your name is revealed as the source of the facts or suggestion for improvement.