June 30, 2010 State Certified Tax Rate for Hamblen County Is $1.86, NOT $1.85 as Found in the June 21st Tax Resolution

                                                                      

You really have to watch your local officials and tax rates in property re-appraisal years---like 2010.

Why? I was serving on commission during the last re-appraisal in 2005. We received the new state certified tax rate in our packets just a couple of days before a budget meeting.  Fortunately, I was familiar with the budget and tax rates. That's why it didn't take long for me to spot an error in the certified tax rate in our packets.

I reported the error to the Assessor who contacted the state. End result: the "new" state certified tax rate for 2005 was changed, REDUCING the tax rate for Hamblen Countians by around 10 or 11 cents. The state and/or locals probably rarely make a mistake on the certified tax rate. [Or maybe mistakes slip by because no one ever verifies the numbers.]  When I was on Commission, I tried to check and verify as much as I possibly could. By checking the certified tax rate in 2005 and getting it cut before any scheduled votes, I was able to save the taxpayers over $1 Million dollars in property taxes.

This year (2010) is also a re-appraisal year.  Commission Chair Stancil Ford has been pushing and pushing to get everything--including setting a new tax rate--wrapped up by June 30.  To help push things along, Stancil even moved the regular June 24 commission meeting to June 21 for a first vote on the new tax rate and budget. One of the documents above is the tax rate resolution that was prepared for the June 21 meeting that would have set the tax rate at $1.85 (countywide + garbage). [This post has been revised to correct a typo and show the uncertified rate proposed on 6/21 as 1.85]

At the beginning of the June 21st meeting, however, before any votes were taken, I reminded the Commission that because this is a re-appraisal year,  they could not vote on a tax rate--or a budget that depends on that tax rate--until the state certified tax rate is received.  Click here. Not only was there no certified tax rate ready on June 21st, but since there was no certified tax rate, no one could have checked the certified tax rate.

At the end of the 6/21 meeting, when the $1.85 tax rate resolution and budget came up, it was admitted that the certified tax rate had not been received and must be received before a tax rate and budget are passed.  No vote was taken.  A vote will probably be taken today at 5:00 PM in the Chancery Courtroom in the old part of the Courthouse.

How important is it that the commission heeded the warning not to vote on a tax rate or any other tax rate until the certified rate is received? 

Well, the state certified tax rate for Hamblen County--that arrived on June 28--is $1.86!  Had the commission voted on the tax rate resolution that was prepared and in their packets on June 21, they would have been violating state law that they wait for the certified tax rate before voting on a tax rate and budget and then they would have been stuck with $1.85 (taxpayers probably wish that had happened!) or they would have had to vote again and "explain" why they rushed the first rate through and are raising the rate to $1.86.  [Two of the documents above give the new new county basic rate ($1.65) and the sanitation rate ($0.21) for a total certified rate of $1.86.]

Haste makes waste. Trust but verify. You might save the taxpayers a boatload of money or save the commission from having to do multiple votes to finally get it right.

April 10, 2008 Is Crumley on the Way Out?

It looks like Morristown City Administrator Jim Crumley has been or soon will be given two options: Resign or be fired.

The rumor going around is that at least four city councilpersons have signed on to the ultimatum. It sure shows what a difference a year can make! It was not that long ago that the council was upset and totally devastated at the thought that Crumley might leave for an administrator job in another city.

There was wailing and gnashing of teeth. Cries of pay Crumley more, give Crumley more benefits, do whatever it takes to keep Crumley directing the city.

Now the reports are coming out on how Crumley has led the city into a financial disaster during the past several years. With Crumley about to depart, mismanagement, overspending, and the horrific accumulation of debt over the past several years are being exposed.

Crumley--now or in the very near future--will get the boot. The Mayor and City Council will use him as a convenient scapegoat for the overspending and debt that has marked the city's recent financial "management."

While Crumley will be blamed, the Mayor and City Council are just as culpable for the overspending and outrageous debt that plagues the city. Crumley can not and did not get the City into the current financial mess all by himself.

When city councilpersons do not ask questions, they are not doing their job for the taxpayers.

When city councilpersons blindly vote for more spending, they are not doing their job for the taxpayers.

When city councilpersons are oblivious and unaware of a pending financial disaster, they are not doing their job.

Crumley bears a great deal of responsibility for the city's financial debacle. But the Mayor and City Council sat there silently and let it happen!

Questions + Checks and balances + Responsibility= Accountability.

Let's hope that the council members now realize that no person, no city administrator, should be given free rein. Council members must PAY ATTENTION and ASK QUESTIONS.

Trust, yes. But always verify! No matter who is in charge.

February 29, 2008 Knox P-card Audit Is Public

When reporters start investigating and when auditors come in and look for fraud, waste, and abuse in government at the local level, it's not a pretty sight. The News-Sentinel has the Knox County government story.

The initial draft of the special audit of Knox County purchasing card (P-card) use is available online.

Follow-up stories are already coming out as a Mayor's aide says receipts may have been turned in and then lost OR maybe newspaper reporters lost them!

If Knox County Commission had been acting as a check and balance on the Knox County Mayor's Office, a lot of the fraud and waste of taxpayer dollars would not have occurred.

If the citizens of Knox County had realized that regular annual audits are little more than a cursory review of the figures that are provided and that there is only an examination of a few sample charges, then they would have demanded real accountability long ago from both the Mayor's Office and the Commission.

Regular audits do NOT look for fraud, waste, and abuse.

Our State Comptroller, who directs all county audits, has stated this.

"Trust, but verify" is the key to true government accountability.

Newspapers--when they choose to investigate and report--are vital in ensuring government accountability.

Local officials and citizens---not a state auditor who just peeks at a few transactions--are important in seeing that fraud, waste, and abuse does not continue and escalate to the level seen in Knox County.

Knox County's cleansing started with a newspaper that began to report and investigate what was going on in government offices and that challenged a power structure that openly violated the open meetings law.

Knox County's cleansing has been pushed along by talk-radio that allows the public to listen and actively participate in discussions about government actions as well as other local concerns.

Knox County's cleansing has been spurred by several citizens--former accountant Lewis Cosby is among the most prominent--who were so incensed by the waste of THEIR tax dollars that they took action. Lewis Cosby went to the Mayor's office, reviewed and copied documents, and started a detailed examination of invoices, payments, slush funds, and the like.

As Mr. Cosby began to detail the outrageous lack of fiscal control in the Mayor's office, Knox County Mayor Mike Ragsdale called Mr. Cosby a showboat at a public meeting! Name-calling instead of addressing the issue--a typical response from a politician.

Mr. Cosby was not a showboat. Mr. Cosby was a citizen who was indignant about waste of taxpayer dollars--his own and those of others.

Now, it looks like Mr. Cosby was right all along about fraud, waste, and abuse in Knox County government.

The question is, 'what happens next?'

A lot of commenters at the end of the News-Sentinel article are asking for restitution, firings, criminal charges, and/or ouster suits for elected officials.

Tthe officials and employees will submit their responses to the audit, and only then will it be crunch time.

Who enforces the law against the lawmakers? Who watches and prosecutes government corruption?

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. http://www.comptroller.state.tn.us/

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.

July 8, 2005 Trust, but verify! Saving Taxpayers $1.2 Million

"Trust, but verify."


We had a Budget Committee meeting yesterday, July 7. Commissioners got work packets and financial data to prepare for the meeting on July 5. In our work packets, the state had reported a new countywide certified tax rate of $1.95. The Trustee had taken this new tax rate and had run new revenue calculations. The Finance Director had prepared a new budget summary using the new rate and revenue calculations. BUT...

Fortunately, the packet included the worksheet showing how the new tax rate of $1.95 had been calculated by the state. I looked at the state's calculation of the new rate and immediately spotted a problem. A wrong number had been plugged in to the calculation. The rate had been miscalculated and appeared to be too high by 11 cents.

I called the Assessor who immediately called Nashville and within a short time we had a new LOWER tax rate of $1.84. Anybody can make a mistake. As the old saying goes, "Trust, but verify." That's the only way to be accountable and take care of tax dollars. In this case, a simple review of the figures resulted in a savings to county taxpayers on their tax bills of close to $1.2 million dollars.

The Assessor, Trustee, and Finance Director handed out corrected information on the tax rate, revenues, and budget summary, and the Committee discussed the 06 budget briefly. There was some good financial news presented at the meeting. Our worker's compensation premiums have gone down significantly.

Since 05 closed out on June 30, I asked that the Trustee and County Mayor/Finance Director provide updated 05 revenue and expenditure reports before we proceed further with budget deliberations. It will be helpful to get a final, more accurate picture of revenues and expenses of the year just completed before we finalize a spending plan and set a tax rate for the next year. These officials agreed to provide the 05 figures before we meet again on Wednesday, July 13.

I also brought up Metro, joint city-county government. I keep hearing commissioners and residents say it's time to look in to this, but we haven't taken any concrete step toward exploring this. Several commissioners said that they think the City of Morristown will resist any move toward Metro. I certainly hope there won't be any knee-jerk opposition to Metro. Geographically, Hamblen is the third smallest county in Tennessee, and there is only one city in the county. We are an ideal candidate for a Metropolitan form of government. It's a proposal that deserves full and fair consideration. There has been way too much city-county bickering in the past.

More on the Budget and Metro to come....

June 22, 2005 State Audit Saves Us Money

Tomorrow is a regular commission meeting. Several important items are on the agenda. For those concerned about accountability--that would be me as in "noe4accountability"-- the biggest item is the county budget amendment process as we determine how amendments to the county's budget will be made and who can make changes. The big question to be answered is whether County Commission retains control and oversight over budget changes or whether we hand all control over to the County Mayor and his office.

I happen to think that the more eyes you have watching how tax dollars are spent, the better, so I will support County Commission retaining control and oversight over amendments that the county mayor brings to us. I will support the Commission and the Mayor acting together in reviewing and approving spending changes (amendments) as has been done in the past. Other Commissioners appear ready to give up Commission's oversight of the shifting of money.

You might wonder why the method of approving budget amendments is coming up at all right now and you might ask how budget amendments are done now. Well, in 2001, a year before I was elected to commission, the county mayor and county attorney drafted a financial management contract listing financial reporting requirements, setting up a finance department and a purchasing agent, outlining budget procedures and amendment procedures, etc. This contract was approved by the previous commission. Unfortunately, when it came to the budget amendment process, there was a problem with the wording in the contract--the wording about how amendments could be done violated state law although what was actually done in everyday practice did not.

The problem with the wording was pointed out to commission by auditors from the state when we received the 2003 county audit (the previous local auditors had never pointed this out). The state auditors said we needed to change the wording of our contract in regard to the amendment process.

NOTE: When I was elected in 2002, the very first thing I proposed was to have these state auditors come in and perform the annual county audit. This passed with an overwhelming majority and the first outside audit by someone other than the local private auditing company covered the 2003 fiscal year and saved the county close to $18,000. That audit was far superior to the previous audits and, as a result, revealed to citizens, taxpayers, and elected officials that handling of the county's finances was, at best, haphazard. The state auditors pointed out that state law was violated when money out of various funds was spent by the county mayor without appropriation or authorization by county commission. The 2003 audit showed a $5 million accounting error by the previous auditor in the posting of the debt of Morristown-Hamblen Hospital. I won't bore you with the other details--you can view the entire 2003 and 2004 audits at http://www.comptroller.state.tn.us/. 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! On the flip side, at least we are now aware of some of the many problems, and we can start turning things around and being more accountable if we choose to.

June 21, 2005, at a budget committee meeting, our county attorney said that our budget amendment wording problem is minor and that we can do one of two things to correct the way our amendment policy is worded: (1) Adopt state law (TCA 5-9-407 a-b) which requires that amendments be brought to commission for approval (which is legal wording and would mean that we would continue to do what we had been doing in the past) or (2) adopt TCA 5-9-407 in its entirety (which is legal wording but this would provide for several different ways for amending the county budget, one of which takes County Commission out of the process and lets the county mayor and/or finance director make budget changes and then tell commissioners what has been done after they've done it.)

If it were your money (and let's remember that all government money IS your money), I'd be surprised if you would spend weeks and months preparing a budget spending plan and then just say to someone, anyone, here's the plan but you just go ahead and spend the money however you want to and then tell me every once in a while what you're doing. That's not accountability--that's commission shirking its responsibility for oversight of the spending of your hard-earned tax dollars. It's an especially questionable method when every Commissioner knows or should know that the 2003 audit had 29 findings and that the 2004 audit points out that the County Mayor and his office were still violating state law, were spending money that hadn't been authorized in five different funds, and were shifting money around between funds without even telling Commission.

On June 23, the Commission will vote on this issue. 11 Commissioners have already indicated in committee that they are willing to hand over fiscal oversight of county spending to the County Mayor and his office, so it seems this measure will pass when Commission votes tomorrow. At that point, Commission will have thrown up the white flag and will have surrendered the current system of checks and balances that have enabled Commission to have some input over spending changes and the shifting of money.

Now, why would Commissioners--who set a tax rate and take your money and who often claim to be "conservative" and "accountable"--vote to give up their current oversight of county spending? Some will say it's because they trust other people to handle this job. That sounds good, but they forget a very famous and very true statement about government that applies here--"trust, but verify." They also forget that our most recent audit for 2004 pointed out that the County Mayor and his office violated state law numerous times in spending money that was never authorized by County Commission and that the County Mayor and his office are still shifting large sums of money around between funds without even informing, much less seeking, County Commission's approval for such transfers. Trust is earned. The 2003 and 2004 audits, which only look at a few sample transactions in the mayor's office, found such serious violations of state law and violations of the county's own procedures that I find it incredible that commissioners can say with a straight face that we should hand all financial dealings over to the Mayor. You don't ask the people who got you into a mess to get you out of it--not when they have been covering up the mess for years.

It's really rather fascinating to watch as the very Commissioners who complain the most about having given up too much of their authority in the past (when the road superintendent became an elected instead of appointed position*) will now vote to give up what few decision-making and oversight duties that they still have. But then maybe accountability was just a word and a convenient campaign slogan for them. I guess they think it would require way too much thought and effort and time on their part to actually be accountable with your tax dollars.

Linda

*I wasn't on Commission when the road superintendent position became an elected one, but I frequently hear comments from those who were on Commission then who say that Commission gave up a lot in making the change from an appointed to an elected road superintendent.